Thought you’d seen it all this political season? An ad from Democrat Alison Lundergan Grimes criticizes Sen. Mitch McConnell for his vote on a bill that President Obama praised, and even thanked McConnell by name for supporting.
The Grimes ad says McConnell “even voted to end the payroll tax credit” and refers in small print to McConnell’s vote in favor of the fiscal cliff deal that permanently extended the Bush tax cuts for most but allowed a temporary payroll tax cut to expire. All but three Democrats also voted for the bill, and the expiration of the payroll tax holiday was even supported by the likes of Obama’s treasury secretary, Timothy Geithner, and Nancy Pelosi, the top Democrat in the House.
The ad also paints McConnell as “a multimillionaire who voted repeatedly for pay raises for himself and other senators.” But the ad is cherry-picking, ignoring other votes McConnell has cast to prevent automatic pay increases for members of Congress. And the fact that McConnell is a multimillionaire has less to do with his congressional pay and much more to do with his wife’s money.
As the Kentucky Senate race heads into the final weeks, recent polls suggest it will be a tight race right to the finish. Both campaigns this week released a flurry of new ads attacking each other.
This latest Grimes ad, titled “Hurting Us,” stretches the facts to make the point that McConnell has enriched himself while voting against bills that could boost the economic well-being of Kentuckians.
Narrator: “Who is Mitch McConnell working for? He’s a multimillionaire who voted repeatedly for pay raises for himself and other senators. And for Kentucky families? McConnell voted 17 times against raising the minimum wage, opposed tax credits for small businesses that create jobs, and even voted to end the payroll tax credit, costing families an extra $2,000 a year. Mitch McConnell: taking care of himself, hurting us.”
The Payroll Tax Credit
We’ll address each of the ad’s claims, but let’s start with the claim that McConnell “even voted to end the payroll tax credit.”
At issue is the payroll tax holiday enacted in 2011 as part of the bipartisan agreement to extend the Bush-era tax cuts. Proposed by President Obama to provide some recession relief, it reduced the employee share of the Social Security payroll tax from 6.2 percent to 4.2 percent for a year, saving a family earning $50,000 a year about $1,000. McConnell voted in favor of it.
A second round of congressional haggling began the following year, when the payroll tax holiday was set to expire. Both Democrats and Republicans — including McConnell — professed to want to extend it for a year, but there was a partisan disagreement over how to pay for it. McConnell balked at a Democratic plan that called for paying for the tax cut with a new 3.25 percent tax on income over $1 million. McConnell said at the time he would support a payroll tax cut so long as there was no tax increase to pay for it.
Indeed, McConnell ended up supporting a bipartisan compromise bill in February 2012 that extended the payroll tax holiday for another year, but was not offset with a tax increase on millionaires (or any other taxes or spending cuts).
So it can be said that McConnell voted for the bill that initiated what was promoted at the time as a temporary, one-year payroll tax holiday. And with the economy continuing to flounder, he voted the following year to extend it for another year.
This brings us to early 2013 and the vote cited in the Grimes ad.
Leading up to the vote, the White House and top Democrats sent mixed signals about whether they wanted to extend the payroll tax cut for yet another year.
In September 2012, then-Treasury Secretary Timothy Geithner testified before a Senate Budget Committee that he thought it was time for the payroll tax holiday to go.
New York Times, Sept. 30, 2012: “This has to be a temporary tax cut,” said Timothy F. Geithner, the Treasury secretary, testifying before the Senate Budget Committee this year and voicing the view of many in the White House and on Capitol Hill. “I don’t see any reason to consider supporting its extension.”
The same New York Times article noted that “Nancy Pelosi of California, the top House Democrat, has told reporters she thinks it should expire.”
In an article on Nov. 29, 2012, the New York Times reported that the Obama administration was attempting to put a payroll tax extension back in play in negotiations with Republicans. But it’s unclear how hard the administration ultimately pushed. As we noted in a story about the fiscal cliff negotiations that year, extending the payroll tax cut was not part of Obama’s 2013 budget. And whether it was part of the Obama administration’s initial fiscal cliff proposal is a bit fuzzy. As we reported on Dec. 5, the president’s opening offer in the fiscal cliff negotiations included $200 billion in new stimulus spending. At that time, Treasury declined to give us a detailed list of proposals for new spending, but it did confirm published reports that some of the elements of the stimulus plan might include an extension of the payroll tax holiday.
In any event, an extension of the payroll tax cut was not included in the fiscal cliff compromise deal — known as the American Taxpayer Relief Act of 2012 — that was reached on New Year’s Day in 2013. McConnell voted for the bipartisan deal, which permanently extended Bush-era tax cuts for everyone except for individuals making more than $400,000 and couples making more than $450,000 a year. Technically, it was not a “vote to end” the payroll tax holiday. The 2012 payroll tax cut contained a sunset provision, and it was simply allowed to expire. But the compromise deal had the same effect.
The fiscal cliff deal was praised by President Obama in an address that same day.
Obama, Jan. 1, 2013: Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle-class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America.
Obama even thanked by name those who he said helped forge the bipartisan agreement — including McConnell.
Obama, Jan. 1, 2013: I want to thank all the leaders of the House and Senate. In particular, I want to thank the work that was done by my extraordinary vice president, Joe Biden, as well as Leader Harry Reid, Speaker Boehner, Nancy Pelosi and Mitch McConnell. Everybody worked very hard on this and I appreciate it.
Obama made no mention of the expiration of the payroll tax holiday in his speech.
Only three Democratic senators voted against the bill, and two of them — Michael Bennet and Tom Carper — made no mention of the expiration of the payroll tax holiday as a sticking point in statements explaining their votes. In other words, while the ad rightly notes that McConnell voted for a bill that did not extend the payroll tax holiday, the same could be said of all but three Democratic senators, and Obama, for that matter, since he signed it.
Pay Raises
The Grimes ad also dubs McConnell a “multimillionaire” and pairs that fact with the claim that he “voted repeatedly for pay raises for himself and other senators.”
We looked into McConnell’s record on voting for pay raises back in June 2013 when the Democratic groups Senate Majority PAC and Patriot Majority USA ran an ad claiming that McConnell voted four times to raise his own pay. We confirmed that McConnell voted against a 2009 appropriations bill with a provision eliminating the pay raise scheduled to take effect in 2010, and that he cast votes in 2001, 2002 and 2003 to block amendments to bills that would have prevented adjustments in fiscal years 2002, 2003 and 2004, respectively. The Grimes ad cites those same four votes.
But we also concluded the claim “simply ignores other votes he has cast to prevent automatic pay increases for members of Congress” including measures that blocked pay increases in 2011, 2012 and 2013.
The ad is also deceptively worded when it links the pay raises to the fact that McConnell is a multimillionaire. The Center for Responsive Politics ranks McConnell as the 10th wealthiest senator, with a net worth somewhere between $9.2 million and $36.5 million (based on the value ranges of assets from financial disclosure forms).
But as our fact-checking colleague at the Washington Post Glenn Kessler notes, the bulk of McConnell’s wealth comes via an inheritance (valued at between $5 million and $25 million, according to McConnell’s 2008 financial disclosure statement) from the mother of McConnell’s wife, former Labor Secretary Elaine Chao, as well as income earned by his wife. So McConnell is a multimillionaire, but not because of Senate pay raises he once supported.
Tax Credits for Small Businesses
Finally, the ad says McConnell “opposed tax credits for small businesses that create jobs” and in small print cites Senate roll call vote 177 on July 12, 2012. That was a vote against cloture that effectively denied a vote on the Small Business Jobs and Tax Relief Act, a bill that sought to provide incentives to hire new employees by giving businesses a 10 percent income tax credit on new payroll.
In its backup for the ad, the Grimes campaign cites a July 12, 2012, Washington Post story that says the Democratic plan for small-business tax breaks got caught up in a partisan “procedural debate over how and when the Senate should vote on a broader proposal to extend the Bush-era tax cuts that expire at the end of the year.”
McConnell’s campaign says he preferred a Republican alternative for small-business tax relief, one originally proposed by then-Rep. Eric Cantor in the House. The Cantor alternative was offered as an amendment to replace the Small Business Jobs and Tax Relief Act, but it was tabled by a vote of 73-24. The alternative plan would have allowed businesses with fewer than 500 employees to take a tax deduction equal to 20 percent of their active business income earned in the U.S., a cut that would have provided about $46 billion in tax relief to small businesses.
The McConnell campaign argues the Republican alternative would have provided meaningful relief, while the Democratic plan would not. We take no position in the political debate over which plan would have provided more small-business tax relief. We only note that there were different visions for small-business tax relief, and McConnell preferred the Republican one. The vote against the Small Business Jobs and Tax Relief Act fell almost entirely along partisan lines, with just two Republicans supporting it, and one Democrat against it.
As for the ad’s claim that McConnell has voted 17 times against raising the minimum wage, McConnell has been consistently outspoken about his opposition to raising the federal minimum wage, arguing that it is a job-killer. For some flavor of McConnell’s position, see a transcript of his speech from the Senate floor when in April he successfully filibustered a Democratic bill that sought to raise the minimum wage, saying it could result in job losses.
— Robert Farley