This week, the Republican leadership in the U.S. Senate will attempt to ram through a permanent repeal of the estate tax. A companion bill has already passed the House.
Under the Bush administration, the estate tax has been cut to the point where less than one estate in a hundred pays any tax. The revenue loss is one big source of the mounting national debt.
The recent cuts in the estate tax expire in 2011. Republicans, who expect to lose seats in November, want to enact permanent repeal now, while they still have the votes.
If they can't find the votes for total repeal, they at least want to further cut the rate to something like 15 percent and raise the exemption to at least $3.5 million for an individual and $7 million for a couple.
According to the Center on Budget and Policy Priorities, getting rid of the estate tax altogether would cost the Treasury a trillion dollars over 10 years. The "compromise" would cost about $500 billion to $600 billion.
Republicans also want to get this done fast before the newly appointed Treasury secretary, Henry M. Paulson, chief executive of Goldman-Sachs, faces potentially embarrassing confirmation hearings. Paulson is allegedly a deficit hawk. With a personal net worth of about $700 million, he's also a poster child for why the super-rich can well afford to have their estates taxed.
As the Bush people searched for a new Treasury secretary to restore its tattered credibility in financial markets, Washington observers noted that the administration was having trouble, because no serious person from Wall Street would defend the Bush deficits. Paulson's story is that we should reduce the deficit by reining in spending. But domestic spending has already been cut to the level of the 1950s, and Paulson is not about to cross his commander-in-chief on war spending.
Democrats could go to town on this issue. As Paulson makes his round of Senate courtesy calls, they should press him to oppose estate-tax repeal.
However, several Senate Democrats are wobbly on this issue. Max Baucus, the ranking Democrat on the Finance Committee, is said to be negotiating with his Republican counterparts to enact the "compromise."
Baucus, from Montana, inherited an 80,000-acre sheep ranch, one of the biggest in his state. He invokes the plight of family farmers, whose inherited homesteads are supposedly threatened by estate taxes. Yet the conservative American Farm Bureau Federation could not identify a single farm that had to be sold to pay taxes, even under current rates.
Republicans are confident that at least three other Democrats would follow Baucus's lead --Blanche Lincoln of Arkansas, Ben Nelson of Nebraska, and Bill Nelson of Florida. Several other Democrats are still undecided on whether to hand the wealthiest one percent of Americans an even bigger break, at cost to fiscal solvency. The Republicans, with 55 senators, need at least five Democrats to help them get cloture on this vote.
The other shaky Democrats include Senators Patty Murray and Maria Cantwell of Washington state. Cantwell was a well-off high-tech executive. Murray got elected as an ordinary mom "in tennis shoes" who spoke for the common citizen. From 2001 to 2003, she chaired the Democratic Senate Campaign Committee, courting wealthy donors.
Who exactly needs Cantwell and Murray to support another huge tax cut for the wealthiest? Their own families? Campaign contributors?
Three other wavering Democrats are Ken Salazar of Colorado, Mary Landrieu of Louisiana, and Mark Pryor of Arkansas. These "red" states are conservative on social issues, but what does their average citizen gain from estate-tax repeal?
Where does Mary Landrieu think the money will come for Louisiana's flood defenses if Congress keeps gutting the tax code? The average Arkansan can only dream of worrying about the estate tax, but lead promoters of repeal are the Arkansas-based Walton family billionaires of Wal-Mart fame.
Here in New England, Maine's two Republican senators are undecided. You can count on Olympia Snowe and Susan Collins to talk moderate but often help fellow Republicans when their votes are needed. Rhode Island Republican Lincoln Chafee, who is in a tough reelection fight, is opposed.
The Senate is such a millionaire's club that more than half the senators should recuse themselves on this vote, which would personally benefit them.
With Bush's popularity ratings scraping bottom, if Democrats can't manage to embarrass Republicans on this one, you can understand why they're losing their historic role as the believable party of the common American.
Robert Kuttner is co-editor of The American Prospect. This column originally appeared in the Boston Globe.
