In the House, Democratic leaders spar over war tax

McClatchy NewspapersDecember 2, 2009 

WASHINGTON — House Budget Committee Chairman John Spratt on Tuesday criticized a "war tax" proposed by House Appropriations Committee Chairman David Obey in an unusual public spat between two top Democrats.

The dispute between Spratt and Obey, who work closely together to set spending limits, shows the difficulties President Barack Obama and congressional Democrats face as they try to pay for Afghanistan, health care and other costly initiatives amid rising federal deficits.

After a five-month review of U.S. policy in Afghanistan, Obama announced plans Tuesday evening to send 30,000 additional troops to the South Asia nation.

Spratt, a South Carolina Democrat, said income taxes shouldn't be raised to pay for the troop buildup.

"I don't think it's timely to put a surcharge on income given the state of the economy," Spratt told McClatchy.

Spratt said the projected cost of sending 30,000 more troops to Afghanistan is about $15 billion. Obama put the price tag at $30 billion.

Much of that cost will likely be offset by savings from removing troops and equipment from Iraq, Spratt said.

"The builddown in Iraq is likely to be a bit faster than the buildup in Afghanistan," Spratt said. "Consequently, the savings from the Iraq deployment will offset the increased deployment in Afghanistan."

When he introduced the Share the Sacrifice Act on Nov. 19, Obey, a Wisconsin Democrat, said he opposed a troop increase in Afghanistan.

If Obama dispatches the extra troops, Obey said, taxpayers should make financial sacrifices to share the burdens borne by soldiers and their families.

"Regardless of whether one favors the war or not, if it is to be fought, it ought to be paid for," Obey said. "The only people who've paid any price for our military involvement in Iraq and Afghanistan are our military families. We believe that if this war is to be fought, it's only fair that everyone share the burden."

The measure has 10 co-sponsors, among them House Financial Services Committee Chairman Barney Frank of Massachusetts; Pennsylvania Rep. John Murtha, chairman of the powerful defense appropriations subcommittee; and Rep. John Larson of Connecticut, the No. 4 Democratic House leader.

Obey's tax is a graduated levy that would impact most Americans but would hit wealthier ones harder.

House Majority Leader Steny Hoyer of Maryland said Tuesday that he supports the concept of a special war tax, but he said it shouldn't be imposed during the current economic recession.

Hoyer blamed former President George W. Bush for the difficult choices now facing Obama.

"Unfortunately, we find ourselves as the inheritors of two challenges of significant proportion," Hoyer said. "A failed economy and a failure to succeed in Afghanistan."

Spratt said Obey's measure could gain political traction because it appeals to two groups of House Democrats — fiscal conservatives and anti-war lawmakers who want to increase the pressure to leave Afghanistan.

"Somewhere down the road, we may have to confront this issue — the cost of this deployment and what it does to the deficit," Spratt told ABCNew.com's "Top Line" Webcast. "But we don't want to raise taxes — particularly a surcharge on income taxes — in the midst of a bad recession."

WAR TAX BRACKET

Some House Democratic leaders back a tax "surcharge" to pay for sending more troops to Afghanistan. It would add 1 percent — not of income, but of the tax rate — for American families earning up to $150,000.

Income up to that level is taxed at four different rates, so the graduated surcharge would increase as reported income rose. The following figures are for joint filers; the income cutoffs would be about half as high for individual taxpayers:

10 percent bracket becomes 10.1 percent for the first $16,700 in income

15 percent bracket becomes 15.15 percent from $16,701 to $67,900

25 percent bracket becomes 25.25 percent from $67,901 to $137,050

28 percent bracket becomes 28.28 percent from $137,051 to $150,000

$150,001 to $250,000 : Rate to be determined by the president

Over $250,000: Surcharge is double that for the $150,001-$250,000 level

The president could waive the surcharge for one year if he determines that the economy can't support it. The families of soldiers who've served in Afghanistan or Iraq would be exempt from the surcharge.

Source: House Appropriations Committee

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