Sessions Predicts Tax-Cut Extensions After Election

Representative Pete Sessions said Republicans won't settle for allowing the Bush-era tax cuts to continue for only middle-class Americans

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By James Rowley

(Bloomberg) — The head of the Republican effort to gain a U.S. House majority predicted Congress won't enact tax-cut extensions until after November's elections when Democrats will be forced to accept tax relief for the wealthiest Americans as well as the middle class.

Representative Pete Sessions said Republicans won't settle for allowing the Bush-era tax cuts to continue for only middle-class Americans, as President Barack Obama and Democratic congressional leaders want.

"I cannot vote for and should not vote for a tax increase" because "if you leave out the investor and the person who brings capital to the table, you cannot grow the economy and we will continue to have joblessness," Sessions, of Texas, said on "Political Capital with Al Hunt," airing this weekend on Bloomberg Television.

Sessions envisioned a scenario of a lame-duck session, after the elections and before he believes a Republican House majority will be sworn into office in January, as the venue for settling the question of tax cuts set to expire Dec. 31.

Democrats are pushing Obama's plan to let tax cuts for the wealthiest 2 percent of Americans expire and permanently extend lower rates on individuals with incomes up to $200,000 and for couples with incomes up to $250,000.

'Glide Path'

Sessions, 55, chairman of the House Republican Campaign Committee, said his party will take firm control of the House in November, gaining more than the 39 seats needed. "We're going to be in the mid-40s," and there are "some 80 seats that are very competitive," he said. Republicans are "where we can come in with a glide path."

While Republicans would use that advantage to try to repeal some of Obama's legislative achievements—primarily the health-care law—Sessions said leaders wouldn't support Tea Party suggestions of shutting down the government to save money.

If Republicans win control of one or both houses of Congress, any action on reducing spending on entitlements such as Medicare and Social Security would be deferred until a political consensus emerged on how to restructure programs that are headed for fiscal bankruptcy, Sessions said.

First, "you've got to have a national dialogue," Sessions said. "We're going to get the American people behind it."

Overhauling entitlements must await economic recovery because "without jobs, Social Security is dead," he said. "Until we get jobs back, there is nothing more important," he said. To that end, "we need to quit the spending, we need to quit the taxing."

Freezing Hiring

Pressed to explain how government spending would be cut, Sessions said Republicans would "freeze all government hiring" by going "back to a level and require the government to live within its budget."

He declined to identify other ways to cut spending except to say Congress should stop growing "the size of government" to increase financial regulation and administer the guaranteed student loan program previously run by private companies.

Sessions's idea for a hiring freeze was based on a May 25 Wall Street Journal op-ed article by New York University government professor Paul Light, said the lawmaker's spokeswoman Emily Davis. Light suggested that the government could save $200 billion over an unspecified period of time by not hiring replacements to fill jobs left vacant as about 500,000 baby-boomer federal workers reach retirement age.

$447 Billion

The federal government will spend $447 billion this year on personnel costs, according to the White House budget office, a figure projected to rise next year to $457 billion. This year's deficit is $1.342 trillion.

Republicans would use their newfound power to roll back some of the Obama administration's signature achievements.

Rescinding the financial regulatory law, which virtually all Republicans opposed when it passed Congress earlier this year, would take a "back seat" to repealing the sweeping overhaul of health care enacted in March, Sessions said.

The health-care overhaul, which will extend health coverage to 32 million uninsured Americans and place new restrictions on insurers, is already "raising the rates of insurance," Sessions said. "It is causing business to go out of business," and "it's putting a huge burden on every state."

A member of the House Republican leadership, Sessions dismissed talk by Tea Party activists and some members of his party such as Representative Lynn Westmoreland of Georgia who want to save money by shutting down the U.S. government as a Republican-controlled Congress did from mid-December 1995 to early January 1996.

No Shutdown

"We're not going to shut down the government," he said.

Congress is in session until early October for a pre-election debate over the tax cuts enacted during George W. Bush's presidency. Sessions said a vote on extending any tax cuts won't take place until after the election when "we will be on the agenda where America is."

In the meantime, voters will "watch to see exactly how" House Speaker Nancy Pelosi of California "and the Democrats move their agenda forward" before the election, he said.

Senate Democratic leaders are preparing to seek a vote on Obama's tax legislation later this month. Pelosi and other House Democratic leaders, under pressure from some in their caucus to postpone a vote until after the election, have declined to specify when the House would act.

Session predicted a Republican victory on Nov. 2 because voters "are going to remember in November what has happened these last 19 months, and the Democrats are going to ask to be re-elected to do the exact same thing they're doing."

— With assistance from Brian Faler in Washington.

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