By Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Monday, November 15, 2010; 10:30 PM
Congress returned Monday to a tumultuous political landscape, with Senate Republican leader Mitch McConnell conceding to a top demand of the tea party movement by endorsing a ban on earmarks.
McConnell, a master of purveying federal pork for his home state of Kentucky, had stood firm in his defense of the practice. But an insurgent group of conservatives led by Sen. Jim DeMint (R-S.C.) had rallied enough senators to defeat McConnell if the issue came to a vote.
With just two GOP senators on the record in support of McConnell's position, the minority leader announced his reversal on the Senate floor moments after the chamber was gaveled into session after the midterm-election break.
Although the Senate Republicans' earmark ban is not binding, McConnell's commitment to ending the designation of federal funding for pet projects illustrates the tremendous pressure incumbents in both parties are under to surrender some of the privileges of office in the aftermath of a voter uproar on Nov. 2.
"I know the good that has come from the projects I have helped support throughout my state. I don't apologize for them," said McConnell, whose earmark tally in recent years approaches $1 billion, according to the government watchdog group Taxpayers for Common Sense. "But there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the waste and the out-of-control spending that every Republican in Washington is determined to fight."
Meanwhile, Senate Democrats made their own concession to the new political reality by elevating the party's most combative spokesman, Sen. Charles E. Schumer (N.Y.), to a new leadership role. He will be in charge of a messaging and rapid-response team that will push back against Republicans.
Senate Majority Leader Harry M. Reid (Nev.) announced the addition of freshman Sen. Mark Begich (Alaska) to his leadership team, responding to a call by junior lawmakers for a greater voice in decision-making.
Senate Democrats and Republicans are scheduled to meet Tuesday to vote on party leaders for the next Congress, while House Democrats and Republicans will hold their leadership elections Wednesday.
Although Democrats still control the House and Senate for the rest of the year, party leaders have started adjusting to the idea of the coming divided Congress and a more conservative Republican opposition.
Democrats will face pressure to make room for Republican views on issues such as taxes and spending, two matters that will dominate the lame-duck session. President Obama has already signaled that he is open to a compromise that would extend income tax cuts even for high earners to prevent an across-the-board tax increase on Jan. 1.
"The voters didn't elect only Republicans. They didn't elect only Democrats. And they don't want either party to govern stubbornly, demanding their way or the highway," Reid said.
But on the Republican side, McConnell and House Minority Leader John A. Boehner (Ohio), the presumed speaker-to-be, face an emboldened conservative wing that could prove intolerant of any compromise with Democrats - even if it forces lawmakers to meet far into December.
"Our agenda-setting demand for the elimination of earmarks is a clear indication of our intent to carry out the will of the 2010 election results immediately and for many years to come," Mark Meckler, national co-coordinator of the Tea Party Patriots, said in a statement.
Amid the tumult of leadership elections and an arriving batch of freshmen who promise to challenge the institution at every turn, Congress faces pressing deadlines on fiscal and economic policy. Emergency jobless benefits will expire Nov. 30 unless Congress acts, leaving as many as 3 million people without unemployment checks. Doctors who see Medicare patients also face a Nov. 30 deadline: Their rates are scheduled to be cut by 23 percent unless lawmakers approve a reprieve.
A new budget bill must be adopted by Dec. 3 to keep the government from shutting down. And House Democrats want to push through another $250 bonus for Social Security recipients, who otherwise would receive no cost-of-living increase for a second year because of the weak economy.
Job One for both parties, however, is preventing the expiration of tax cuts that benefit virtually every American family. The cuts, enacted during the George W. Bush administration and in last year's economic stimulus package, are set to expire Dec. 31. Unless Congress acts, workers across the income spectrum could see sharp reductions in take-home pay starting in January.
For example, a middle-class family with two children making $40,000 a year would have an additional tax bite of $212 a month if the tax cuts lapse, according to estimates by the nonpartisan Tax Policy Center. Meanwhile, a family with four kids earning $100,000 a year would stand to lose nearly $440 a month.
So far, public attention has focused on the Bush tax cuts, which reduced rates on income, capital gains and dividends; eliminated a built-in tax penalty for married couples; and doubled the child tax credit, among other provisions. Republicans want to extend all those cuts, while Democrats want to let them expire for family income above $250,000 a year.
Since the midterm elections, both parties have been inching toward a compromise that would temporarily extend the cuts for all taxpayers. But it remains unclear what shape such a deal could take.
The White House wants to "decouple" the upper-income cuts from cuts that benefit the middle class by extending them for different periods of time. For example, cuts that benefit families making less than $250,000 a year could be permanently embedded in the tax code, while those that affect wages above that threshold could be extended for one or three years, forcing Republicans to try to extend them separately.
Democrats have ruled out a two-year extension to avoid a tax fight in 2012, when Obama is up for reelection. "Everybody recognizes the concern with doing two years," said one Democratic aide who is enmeshed in the tax-cut debate and who spoke on the condition of anonymity to discuss party thinking.
Key Republicans have dismissed decoupling as unacceptable and are pressing for all the provisions to be extended for the same period of time - a position many Democrats view as capitulation.
As lawmakers prepare for a meeting on the topic that the White House has set Thursday, various options are bubbling up, including Schumer's proposal to increase the income threshold from $250,000 to $1 million and a plan by Sen. Mark Warner (D-Va.) to wipe out the upper-income cuts and replace them with $65 billion worth of tax breaks for businesses.
Another idea calls for continuing all the breaks but demanding something from the GOP in return, such as an extension of Obama's signature Make Work Pay tax credit for the middle class, which was enacted in last year's stimulus package..Sen. Kent Conrad ((D-N.D.) has proposed linking a temporary extension to a commitment to overhaul the nation's balky tax code. If an overhaul were not adopted by a set date, Conrad said the measure could impose automatic tax increases or create a fast-track process that would give any measure to reform the tax code special procedural protections.
The tax debate is not expected to begin in earnest until after Thanksgiving, when lawmakers could see yet another issue heaped on their plates: a possible Dec. 1 report from Obama's bipartisan deficit commission. If 14 of the panel's 18 members can agree on a plan to cut spending, raise taxes and trim Social Security benefits, Democratic leaders have vowed to stage a vote on the proposal by the end of the year.