Orrin Hatch picks tax breaks over tea party

For two years, Utah Sen. Orrin Hatch cozied up to the tea party — scoring perfect ratings from the American Conservative Union — and avoided getting dumped in a primary like former colleague Bob Bennett did in 2010.

But now, after winning his late-June Republican primary, Hatch is pushing a bundle of special-interest tax breaks that hard-core conservatives liken to handcuffs on the free market. He wrote the bill with Finance Committee Chairman Max Baucus (D-Mont.) and watched Thursday as five of the 11 Republicans on the panel voted to kill it.

The bill stops the alternative minimum tax from hitting millions of middle-class taxpayers, but it also extends targeted tax breaks for a wide range of businesses and industries, including movie producers and energy companies.

In one way, there’s consistency to Hatch’s position: He has long argued that the special tax breaks should only be scrapped if that decision is made as part of a major reform of the Tax Code. So while letting them go forward isn’t the conservative position, it wouldn’t be a new one for Hatch — except that he says this bill is, in fact, part of tax reform.

He and other supporters — Democrats and Republicans alike — are casting their call to maintain the breaks as a “first step” toward that reform. But for opponents, killing a few tax benefits while keeping the rest of them is akin to a smoker switching to a lighter brand and telling friends he’s quitting. If Congress did nothing, the special carve-outs would die at the end of the year.

Some senators, like Sen. Jay Rockefeller (D-W. Va.), praised the bill for its spirit of reform even as they tried to amend it with new tax breaks.

Hatch called it “a first step towards the ultimate goal of comprehensive tax reform.”

But conservatives don’t see it that way and one website is calling Hatch out by name for his role in drafting the package.

“It’s a shame, yet predictable, that Orrin Hatch would eschew his cathartic conversion to conservatism,” Daniel Horowitz wrote on the conservative website redstate.com. “His overarching selling point for giving him one more term was his promise to bring the glory back to conservatives as chairman of the Finance Committee. Well, now we’re getting a taste of what to expect next year.”

Sen. Tom Coburn (R-Okla.) declined to criticize Hatch, but he articulated his feelings about the policy during debate over a tax benefit for energy-efficient appliances.

“I certainly can’t support borrowing $650 million — because it will be borrowed from our kids and grandkids — and paying it to two or three companies in this country and say we’ve done the right thing,” he said. “It’s the worst form of crony capitalism that I know.”

Overall, the bill would cost $205.1 billion over 10 years with the AMT patch eating up $132.2 billion of that total.

In a new era of political populism — the tea party on the right, the Occupy movement and others on the left — neither party wants to be seen giving special government carve-outs to big business. But they also don’t want to let taxes go up on political patrons during an election year. The answer: Kill a few subsidies to spare the rest and then label the whole package a “reform.”

Hatch saw two potential avenues: work with Baucus and try to prune the package as much as possible or allow Democrats to move forward on their own and load it up with additional costly breaks. Hoping that this type of deal making could lay a foundation for a tax overhaul, he chose the former.

“If it’s a practice round, it certainly doesn’t bode very well for tax reform. Tax reform is going to be extremely tough,” said Sen. Richard Burr (R-N.C.), who voted against the measure. “This was easy compared to what tax reform will look like.”

The GOP is badly divided over the question of whether to stop subsidizing big business. Republican presidential contender Mitt Romney recently said he’d end the wind production tax credit that’s now in the bill.

Hatch appears to be sensitive to that split, and he has emphasized the tax breaks that were left out. After agreeing to the larger deal, the focus on the details leaves Hatch in the position of playing both good cop and bad cop.

“The tide is turning. For the first time in my 21 years on the committee, we are moving in the opposite direction,” he said. “Am I satisfied with the number of drops? My answer is emphatically no. I would like to trim more.”

He also tried to stop Democratic efforts to load up the package with more goodies.

“We as a committee have already done a good job of eliminating a lot of the expiring tax credits,” he said. “A lot of us don’t think we should take two steps back.”

“The truth is if we do tax reform in the first quarter, all of these things are moot,” Burr said. “They’re gone.”

As Hatch lined up with Baucus, it was Coburn who made a stand for conservative orthodoxy. Of the 115 amendments that were offered at Thursday’s committee meeting on the bill, 61 were his — all ending one provision or another.

In an interview after the meeting, Coburn declined to comment on Hatch directly or whether the bill violates conservative principles. Sen. Mike Lee, who defeated Bennett in 2010, declined to comment on Hatch’s role in moving the tax bill forward.

Sen. Pat Toomey (R-Pa.), a leading voice among freshman conservatives in the Senate, said he hadn’t yet studied up on the overall package. But he was certain of how he feels about special tax breaks.

“I am not in favor of using the Tax Code to subsidize business activities,” he said.

I warned a friend in Harriman, Utah, that Hatch was a total chamealon (sp) in ALL of his actions.

Utah has to groom a viable candidate to take over Hatch’s position. They cannot wait until 3 months before the primary to shove someone forward, IMO.

“Utah has to groom a viable candidate to take over Hatch’s position. They cannot wait until 3 months before the primary to shove someone forward, IMO.”

That’s an excellent point. By the time the general election rolls around, we have virtually no choice. Unless a solid conservative is running as a Republican we have to hold our nose and vote for a party hack or go third party.

The primaries should be ground zero for conservatives, and Indiana and Texas have shown the way. We need to be looking NOW for solid conservatives who know how to campaign for the 2014 primaries—against CINOs like Lindsay Graham, Lamar Alexander, etc., etc.

So many silly “conservatives” among us. They will believe anything in the echo chamber. You think Conservatism is taking a hit with the likes of a Hatch? Just watch Conservatism die if, a miracle occurs, and Feckless Mitt is elected.

But, but, but, but, but, but, but, but, but St. Sarah endorsed him. He’d never do a thing like that, pivot to the left after winning the primary. No sirree, he’d never ever even think of remotely considering a move like that.

Not after St. Sarah endorsed him. Tell me it ain’t so. Can’t be true. Someone made this up.

“Every time he makes a bad vote, just for the hell of it, send him a rock or a brick, something to let him know that, though he’s immune again, we’re still watching.”

Hatch will be the most dangerous type of RINO. He is 78 years old. If reelected for 6 years he will be 84 the next time he is accountable to the people and will most likely retire. If he perceives the coming term as his final, he will be free to do whatever he wants. Remember Hatch voted to put David Souter, Stephen Breyer, and Ruth Bader Ginsburg on the Supreme Court. He also voted to confirm Eric Holder as Attorney General.

Hatch doesn’t care if “we” are watching. He cares more about the lunch menu in the Senate dining room tomorrow than he cares about any conservative principle. Unfortunately Utah conservatives were unable to find and get behind someone who could beat Hatch in the primary.

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