Narrow win doesn't change Rep. Rick Larsen's view of tax cuts

Nov 30, 2010

Seattle Times

By Kyung M. Song

WASHINGTON — U.S. Rep. Rick Larsen narrowly avoided losing his seat this month to a tea-party challenger who railed against deficit spending and higher taxes.

So, did voters scare the Lake Stevens Democrat into reconsidering his position on extending the Bush tax cuts? And can Larsen deliver on what he read as the electorate's plea for bipartisanship?

The answer on both counts is likely no.

Back in Congress after his slimmest victory in six elections, Larsen defended his support for allowing tax rates on the wealthiest Americans to rise. He said the $700 billion in revenue that would bring in over the next decade should be used to pay down the deficit.

The GOP opposes it.

"Earlier this year, every Republican was worshipping at the altar of lowering the deficit. But now they don't care," Larsen said. Now "the Republicans have made this about tax cuts and want to ignore fiscal responsibility."

That same sense of stalemate permeates the Capitol far beyond Larsen's office.

President Obama is to host congressional leaders from both parties at the White House Tuesday to forge an agreement on the 2001 and 2003 tax cuts, which are slated to expire Dec. 31, as well as on other pressing economic issues.

Neither side has publicly budged from its stance on taxes: Democrats want to make the cuts permanent only for the middle class; Republicans also want to include individuals earning more than $200,000 and couples with incomes above $250,000.

President George W. Bush's tax cuts were just one of many issues that divided Larsen from his opponent, John Koster, a Snohomish County Council member and a longtime political foe of Larsen's.

Larsen won with 51 percent of the votes in the 2nd District, which stretches from northeast King County through Snohomish County up to the Canadian border.

Larsen favors retaining lower taxes for the middle class even though it would cost the Treasury $3 trillion over 10 years — more than four times the $700 billion that the federal government stands to collect from letting the tax cuts on the wealthy expire.

"These are folks who will actually spend that money," Larsen said.

Debate goes on

Larsen didn't make that distinction in 2001 when he voted for the first Bush tax cuts, which lowered the top rate to 35 percent from 39.6 percent for couples earning more than $373,650.

"I learned what it means not to blow a hole" in the federal deficit, a chastened Larsen said.

Koster counters that the Bush tax cuts drove up the deficit because Congress failed to offset it by simultaneously reining in spending.

And he accuses Larsen of hewing to his party's line by trying to make amends now on the backs of higher-income families.

Koster says raising taxes on anyone simply takes money out of the private sector and would hinder economic recovery.

"He's been [House Speaker] Nancy Pelosi's puppet. Why would he change?" Koster said. "You've got to stop spending money you don't have."

Larsen, for his part, contends that Koster sold some voters on a simplistic vision of easy and common-sense fixes.

"If in fact people want to get a balanced budget, there has got to be a discussion about sharing sacrifices," Larsen said. "But the tea-party representatives don't offer any concept of what that sacrifice is."

Koster said he did push for hard, painful changes: freezing federal spending, hiring and salaries. But even all that would barely make a dent in the $1.3 trillion federal deficit or the $13.8 trillion debt.

Already, a half-dozen serious deficit-reductions plans are floating around — and all of them include remedies draconian enough to make taxpayers blanch.

The draft proposal from the Obama-appointed National Commission on Fiscal Responsibility and Reform, for instance, suggests repealing all $1.1 trillion of federal tax breaks and write-offs, including deductions for mortgage interest and state income and sales taxes, and taxing the value of employer-provided health coverage.

Another plan, from the Bipartisan Policy Center, calls for freezing military spending, raising Medicare premiums and lowering Social Security benefits, among other things.

Contrary to the Democrats' plans, the center's Debt Reduction Task Force also has called for lowering income taxes across the board to 15 and 27 percent, from the current six rates topping out at 35 percent. But it also would impose a 6.5 percent national "debt-reduction sales tax."

Wrenching reckoning

All of which buttresses Larsen's argument that Americans are in for wrenching reckoning when they get serious about confronting the nation's red-ink spending. Foremost in Larsen's plan, he said, is to focus on growing the economy and stimulating spending.

That includes extending unemployment benefits yet again for the long-term jobless — a bill that's stuck in the lame-duck Congress. If the measure fails to pass before the new 112th Congress with a Republican majority in the House is sworn in, Larsen said its chance of survival is zero.

That's one reason why, Larsen said, "I'm not going to rely on Republicans to help me do my job."