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News from the Votemaster

Conservative Republicans Fight Back

For 2 weeks, Republican leaders have been blaming their election defeat on lack of party unity and on Mitt Romney's gaffes. Now conservatives are starting to chafe at these explanations. They say the problem is that Republicans lost in 2008 and 2012 to someone they consider extremely weak because their candidates were not full-throated conservatives. A lot of these people don't want the candidate to waste time opposing gay marriage. They want the candidate to openly quote Leviticus 18:22 "Thou shalt not lie with mankind, as with womankind: it is abomination." These people point out that real conservatives, such as Sen. Jim DeMint (R-SC) and Sen.-elect Ted Cruz (R-TX), have won. What they fail to point out is that they won in states where any Republican can beat any Democrat. In purple states, like Colorado, Nevada, and Missouri, conservative Senate candidates who won primaries in 2010 or 2012 were roundly trounced in the general election. In 2012 in Indiana, a red state, a conservative Senate candidate was defeated for trying to defend a ban on all abortions, including for pregnancies resulting from rape. That was not a slip of the tongue. It is enshrined in the 2012 Republican platform, forcing candidates to defend it.

If conservatives continue to speak up--and there is every indication they will--there will be a civil war within the Republican Party, as the nonideological leaders, like Speaker John Boehner and Senate minority leader Mitch McConnell understand the demographic and issue problems the Republicans have. They are under no illusion that Latinos are really secret conservatives and if the immigration issue can somehow be dealt with, they will suddenly all vote Republican. The battles are only starting and they are going to be very messy.

Saxby Chambliss May Face a Primary Challenge

Although Sen. Saxby Chambliss (R-GA) is an extremely conservative southern senator, he is not conservative enough for some people and may face a primary challenge in 2014, possibly from the ambitious Rep. Tom Price (R-GA). It is unlikely, however, that Georgia 2014 will be a repeat of Indiana 2012 because Chambliss is much more acceptable to conservatives than Sen. Richard Lugar (R-IN), who lost a primary to Richard Mourdock. Also, the Democratic bench is thin in Georgia. In Indiana, Democrats had blue dog Rep. Joe Donnelly (D-IN), who ran a stellar campaign and was helped enormously by Mourdock's extremism. Nevertheless, with this year's Senate races in Indiana and Missouri still fresh, there is more than the normal amount of attention being given to the possibility of Chambliss being primaried.

West Tosses in the Towel

Firebrand conservative Rep. Allen West (R-FL) has now conceded defeat to Patrick Murphy in a close Florida House race. West has said many inflammatory things this year, including a claim that 80 House Democrats are secret Communists. Both parties will be glad to see him go.

Eliminating Loopholes Won't Get Us Off the Fiscal Hill

The next month will be filled with talk of the "fiscal cliff"--which is not a cliff at all. If it isn't dealt with until January, nothing terrible will happen. Tax cuts can always be made retroactive to Jan. 1. President Obama says he wants to raise $1.6 trillion in new revenue as part of a balanced deal. Republicans are willing to go along only if the revenue can come from closing loopholes, not raising rates. Politico has a nice story today listing all the "loopholes" (technically "tax expenditures") that affect individuals and how much revenue eliminating each one would generate. The top 10 don't even get half way to $1.6 trillion, and nobody in Washington is smacking his lips at making hamburgers out of sacred cows like the mortgage interest deduction. Also noteworthy in discussions like this is that the only tax expenditures anyone ever talks about are those that affect individuals. The thousands and thousands of genuine loopholes that benefit specific industries are never even on the table.

It is important to understand that raising rates and closing loopholes--even if enough could be found--affect different income groups differently. For the truly wealthy (as opposed to the simply rich), the rates are far more important. Consider someone with $10 billion in assets who is getting a 3% return from dividends. That amounts to $300 million a year, which is now taxed at 15%. If that rate were to go to 39.6%, the billionaire's tax bill would go up by $73.8 million. Even if that person has uncountably many houses (like John McCain), with or without car elevators (like Mitt Romney), there is almost no way his deductions from mortgage interest, employer-paid health insurance, etc. could be anywhere near there. Thus billionaires, if they have to give ground somewhere, would rather give up deductions than face higher tax rates, especially on dividends and capital gains. So when the Republicans dig in their heels at raising the tax rates, under the radar it is clear whose interests they are defending.