A Project of The Annenberg Public Policy Center

NRCC Taxes Logic in North Carolina House Race

A Democratic congressman who has reliably supported extending the Bush tax cuts is now being attacked by a GOP TV spot claiming he “voted for higher taxes on Social Security, small businesses, middle-class families, even marriage.” All those claims are false or, in the case of Social Security, misleading.

The target of this deceptive attack from the National Republican Congressional Committee is Rep. Mike McIntyre of North Carolina, a conservative “Blue Dog” Democrat who bucked his party by voting for every extension of Bush’s cuts, even for upper-income taxpayers.

And how does the NRCC justify its bogus claims? In the case of the Bush tax cuts, the NRCC points to a vote McIntyre cast on a non-binding budget resolution in 2008 that had no impact on the tax cuts because they weren’t scheduled to expire until Dec. 31, 2010. McIntyre voted in 2010 to extend the Bush tax cuts for two years, and he was one of only 19 Democrats this month to vote to extend them for another year. He also twice opposed his own party’s attempts to allow the tax cuts to expire for high-income taxpayers.

On Social Security, the NRCC cites McIntyre’s vote in 2000 against lowering (not a vote for raising) income taxes on Social Security earnings of upper-income taxpayers. The NRCC is employing an old trick, claiming that opposing a tax cut is a vote for “higher” taxes, even though nobody’s taxes would increase.

The ad also recycles an exaggerated claim that President Obama’s stimulus created jobs in China. As we have written before, some components for U.S. wind energy projects and energy efficient traffic lights were manufactured in China. The number of jobs created in China is not known, but only a small fraction of the stimulus was spent on Chinese parts.

McIntyre and the Bush Tax Cuts

McIntyre is an eight-term incumbent from North Carolina, whose seat is in jeopardy this fall. The Rothenberg Political Report gives him less than a 50-50 chance of retaining his seat, placing his district in the “lean Republican” column.

The National Republican Congressional Committee has targeted McIntyre for defeat, and it began airing an ad Aug. 17 that questions if he is doing “what’s best for us” on taxes (certain provisions of the Bush tax cuts) and spending (Obama’s stimulus). The NRCC ad, which is titled “You Decide,” is in response to McIntyre’s ad titled “What’s Best,” in which he claims to do what’s best for his district regardless of party labels.

McIntyre did vote for the American Recovery and Reinvestment Act of 2009, but his record on taxes is more closely aligned with former Republican President George W. Bush.

In the ad, the NRCC says: “McIntyre voted for higher taxes on Social Security, small businesses, middle-class families, even marriage.”

Let’s first look at the claims about voting to raise taxes on small businesses, middle-class families and married couples. When asked to support these claims, the NRCC pointed us to McIntyre’s March 13, 2008, vote on a House budget resolution drafted by the Democrats.

That resolution did three things: revised the fiscal year 2008 budget, set the spending limits for the fiscal year 2009 budget, and set the budget levels for 2010 through 2013.

The Bush tax cuts — which were enacted in 2001 and 2003 — were due to expire in 2010, and the budget levels for 2010 through 2013 set by the House resolution reflected the additional revenue that would be generated from the expiration of the tax cuts. Republicans opposed the bill for that reason, and the NRCC cited an Associated Press article that said the Democrats “would bring the federal budget back into the black by letting all of President Bush’s tax cuts expire at the end of 2010.”

But the fact is that budget resolutions are non-binding, and the 2008 House vote had no effect on tax rates.

Budget resolutions set budget levels that cannot be exceeded, but the “programmatic assumptions (i.e., the specific mix of revenue and spending policies that are assumed within the budget levels) are not binding,” as the nonpartisan Congressional Research Service explains in a March 2012 report on the history of budget resolutions.

“The tax cuts don’t expire until 2010 and nobody’s taxes are going up from what we’re doing on the floor today and no one’s are going down,” said Rep. John Spratt, chairman of the House Budget Committee, according to a March 13, 2008, article by CongressNow.

In addition, the March 7, 2008, House committee report on the budget resolution included policy language to further make it clear that the House Democrats supported providing tax relief for middle-income families and married couples. The budget resolution “does not necessarily assume maintaining current tax law” and thus it “accommodates … extension of tax cuts benefitting middle-income households,” including “marriage penalty relief,” the committee report said.

Spratt, a South Carolina Democrat, said during the floor debate: “We primarily delayed the decision about those tax cuts in 2010 on the basis that we need to know more.” He cited, for example, the need to know about the state of the economy in 2010.

The House bill wasn’t passed by both chambers. It was superseded by the Senate budget resolution, which passed the House 214-203 largely along partisan lines on May 14, 2008. McIntyre voted for the Senate version, too.

The Associated Press reported that the Senate bill provided money “to renew tax cuts aimed at the middle class,” including “relief from the marriage penalty.” But, the AP reported, the Senate budget resolution left the “difficult decisions on automatic tax increases to the next president and the newly elected Congress.”

The difficult decision on the Bush tax cuts came two years later.

Obama and the Democratic congressional leaders pushed at first to extend the tax cuts only for individuals earning less than $200,000 and couples earning less than $250,000. But the president relented and agreed to extend the Bush tax cuts for all taxpayers through 2012.

There were two key votes in December 2010 on the Bush tax cuts in the House, and McIntyre sided with the House Republicans both times:

  • On Dec. 2, 2010, the House voted on a Democratic plan that would have limited the tax cuts to individuals who earn less than $200,000 and couples earning less than $250,000. McIntyre was one of 20 Democrats who voted against that bill. The Democratic tax plan passed the House, but failed to advance in the Senate.
  • On Dec. 17, the House voted to extend the Bush tax cuts for all taxpayers. McIntyre voted for the bill, which Obama signed into law.

The Bush tax cuts are due to expire at the end of this year, and McIntyre, again, has sided with Republicans in seeking to extend them for all taxpayers.

The House voted Aug. 1 to extend the Bush-era tax cuts for one year by a 256-171 vote. McIntyre was one of only 19 Democrats who voted for it. The Senate has yet to act.

Rep. Sandy Levin, a Michigan Democrat, sought to amend the GOP House bill to limit the extension of the tax cuts to only those earning below $200,000 for single taxpayers and $250,000 for married couples. But the amendment (page H5588) failed 257-170. Again, McIntyre joined Republicans in opposing the Democratic plan to limit the tax cut.

As for the original Bush tax cuts, McIntyre supported the 2001 tax cuts, but not the 2003 cuts.

McIntyre was one of only 13 Democrats to vote for the Economic Growth and Tax Relief Reconciliation Act of 2001 when it first came up for a vote on May 16, 2001. He cosponsored two of the bills that later would become part of the Economic Growth and Tax Relief Reconciliation Act: the Marriage Penalty and Family Tax Relief Act and the Death Tax Elimination Act. He did not cast a vote on final passage of the tax package on May 26, 2001.

McIntyre did, however, vote against the 2003 tax bill, which accelerated certain tax cuts adopted in the 2001 law and reduced taxes on dividends and capital gains.

One last thing: McIntyre’s record on marriage penalty relief dates to 2000.

The so-called marriage penalty occurs when a married couple pays more in income taxes as a couple than they would if they filed separately, and it was addressed in the Economic Growth and Tax Relief Reconciliation Act of 2001 under Bush.

But prior to Bush’s tax fix for married couples, McIntyre voted for the Marriage Tax Penalty Relief Reconciliation Act — a Republican-backed bill that then-President Clinton vetoed. McIntyre also voted to override Clinton’s veto of that bill.

McIntyre and Social Security

The ad also makes the claim that “McIntyre voted for higher taxes on Social Security.” That’s not true. He voted against a tax break for certain higher-income seniors. The ad may leave the false impression that he voted to raise taxes on all Social Security recipients. He did not.

Here’s the history of what happened: President Reagan first made Social Security benefits subject to income taxes as part of a 1983 bipartisan agreement that extended the life of the Social Security trust fund. Under the 1983 agreement, up to 50 percent of Social Security benefits could be subject to federal income tax. The tax affected individual taxpayers earning above $25,000 and married couples filing jointly who make more than $32,000.

In 1993, Clinton raised the taxable portion of Social Security benefits to up to 85 percent for individuals earning above $34,000 and married couples making more than $44,000. The additional tax revenue goes into the Medicare hospital insurance trust fund.

McIntyre voted against a Republican-backed bill in 2000 that would have returned the tax to the 1983 level — providing a tax break for higher-income seniors, not a tax hike for all seniors. The New York Times reported that the 1993 tax affected the top income quintile and raised about $8 billion for Medicare in 2000.

The bill passed the House, but died in the Senate.

— Eugene Kiely