GOP: No More Help for Jobless, but Rich Must Keep Tax Cuts
Wednesday 14 July 2010
by: David Lightman | McClatchy Newspapers | Report

Senators Mike Crapo and Mitch McConnell (front). (Photo: talkradionews)
Washington - Republicans almost unanimously oppose spending $33.9 billion for extended unemployment benefits for some 2.5 million people who've lost them, because they say it would increase federal budget deficits.
At the same time, they're pushing a permanent extension of Bush administration tax cuts, especially for the wealthy, which could increase federal budget deficits by trillions of dollars over the next 10 years.
How do they justify this?
"Tax policy is dynamic. If you have the right kind of tax reform, it helps generate a more dynamic economy," said Sen. Mike Crapo, R-Idaho, a member of the Senate Finance Committee, which writes tax law. While that may be true, even the Bush Treasury Department concluded that its tax cuts increase budget deficits.
Besides, wouldn't providing $33.9 billion to extend unemployment benefits to 2.5 million people help the economy?
"There's a distinction between taxes and spending," Crapo said. "We have a huge problem with a lack of spending restraint."
In addition, noted Iowa Sen. Charles Grassley, the committee's top Republican, "This is a tax increase if you don't extend, and it's not a tax cut if you do."
Democrats howl at what they see as hypocrisy.
The GOP argument, said Sen. Tom Harkin, D-Iowa, is "that we should cut off some of the most desperate people in our economy, take away their last meager lifeline, because we're concerned about the deficit.
"Yet those very same senators are demanding that we extend hundreds of billions of dollars in tax breaks for the wealthiest Americans in our society."
The money for jobless benefits is expected to win approval early next week after weeks of Republican-led extended debate.
The next big economic-policy fight in Congress will involve the tax cuts, the 2001 and 2003 cornerstones of former President George W. Bush's economic program. Most are set to expire Dec. 31, meaning that taxes on income, capital gains, dividends and estates would go up next year and the child care credit would be cut in half, to $500 per child.
President Barack Obama would reinstate the top two pre-Bush marginal income tax rates of 36 and 39.6 percent, starting with adjusted gross incomes of more than $250,000 for joint filers and $200,000 for individuals. The current top rates are 33 and 35 percent.
Obama would retain the Bush-era rates ranging from 10 to 28 percent for those who earn less.
Congressional Democrats are weighing whether acting on taxes before the November elections would give them a political boost or instead give constituents troubled by record federal deficits more cause for concern.
"We haven't determined the timetable" for considering tax cuts, said House Majority Leader Steny Hoyer, D-Md.
Asked whether it could be done in a post-election lame-duck session, he said: "The goal was to get it done before they expire."
Conservatives contend that tax policy should be considered differently from spending. Taxes spur the economy, their thinking goes, because the more consumers spend and invest, the more businesses will hire and the more the economy will grow. Reducing tax revenue, they claim, will force spending restraint on Congress.
On the other hand, they say that extending unemployment benefits without offsetting revenue doesn't appreciably boost the economy and could weaken jobless workers' incentive to seek new employment.
Liberals, boosted by a report earlier this year from the nonpartisan Congressional Budget Office, maintain that the jobless benefits go to those who need them most and are likely to spend them quickly, and that multiplies their economic effect.
The CBO and Congress' Joint Committee on Taxation said earlier this year that extending the original Bush-era tax cuts would increase budget deficits by $2.56 trillion during this decade. Deficits under Obama's budget plan are expected to total about $9.75 trillion over the next 10 years.
Other tax experts say the government should tax the wealthy at higher rates so that some wealth can be redistributed to those who may need aid, the traditional progressive taxation principle that guides U.S. tax law.
"I believe it would be a serious mistake to make any of the tax cuts permanent now," said Leonard Burman, a professor of public affairs at Syracuse University's Maxwell School. However, he said, not all of the tax cuts should expire, since "low- and middle-income households are facing serious cash-flow constraints."
Douglas Holtz-Eakin, the chief economist for Bush's Council of Economic Advisers from 2001 to 2002, warned against letting any tax rates rise, saying "the prospect of a large tax increase would force households to undertake even more balance sheet repair."
On The Web
Congressional Budget Office on extending tax cuts
CBO Director Elmendorf on jobless benefits
Cato Institute study of jobless benefits
Senate roll call vote on jobless benefits debate
Tax Policy Center on jobless benefits
National Employment Law Project
All republished content that appears on Truthout has been obtained by permission or license.
Support Truthout's work with a $10/month tax-deductible donation today!




Comments
This forum is moderated by software. Please allow up to 15 minutes for your comments to go live and avoid posting the same comment multiple times.
I have a good friend who is
Thu, 07/15/2010 - 19:37 — mysterioso (not verified)I have a good friend who is misguided and a very conservative GOP member. We always argue over political and economic issues. He owns a small business and it too has been hit by the recession. He's had to lay off a few people. Bummer. Within the last three months he's had an upturn in his business and has seen more cash flow than for a couple of years. Did he hire more employees? No. Did he give more hours back to those who had their hours cut? No. What did he do with the amazing profits he's earned in the last 6 months? He had a new, huge, backyard pool installed, bought himself and his wife expensive foreign new cars and sent his daughters to vacation in Europe. How's that for trickle down?
Justification? They could
Thu, 07/15/2010 - 20:00 — mikel paul (not verified)Justification? They could care less.
Because they can, have and will continue to take what is not theirs in every way they can.
They have no empathy. None.
'Do no harm'
.....to them is but a joke.
Hug your kids. Keep it Local.
peace
Mysterioso nailed it as to
Thu, 07/15/2010 - 20:38 — Ewh (not verified)Mysterioso nailed it as to why trickle down never works.
It's just seen as more profit.
The recession they created worked beautifully for them...again.
More proof the Republican
Thu, 07/15/2010 - 20:39 — Anonymous (not verified)More proof the Republican Party is nothing more than a club for sociopaths.
Trickle down economics is
Thu, 07/15/2010 - 20:54 — Kentuckian (not verified)Trickle down economics is just another way of saying piss on the poor! Mitch McConnell has done nothing to help the people of eastern KY and he never will, yet people keep right on voting for him! I just don't understand it...
The Republican’s cynicism
Thu, 07/15/2010 - 22:00 — Anonymous (not verified)The Republican’s cynicism is nauseating. They oppose every single, even meager help, for people. Do self appointed religious, family value leaders have any conscience. But the most absurd is that they are likely to get back the House. Well, maybe they are better than the current half performing administration. Republicans are all for the big money, and the actual administration is making all sort of half made reforms which leave everything intact, with practically negligible benefits for the people. And the vicious circle goes on, democrats-republicans-democrats forever on. The only result of trickle down economics is poverty, unemployment, lack of heath coverage, malnutrition, and more maladies. The evidence of the 25 years in more than 100 countries is more than eloquent. The rest is Crap.
The Republicans are
Thu, 07/15/2010 - 22:48 — Anonymous (not verified)The Republicans are disgusting. We must do everything we can to keep them out of power.
With election season coming
Thu, 07/15/2010 - 23:41 — Anonymous (not verified)With election season coming up it probably doesn't benefit GOP incumbents at the polls to extend unemployment benefits as much as it does to maintain tax cuts for the wealthy. It's sad the very system we use to elect our officials works against our own interests. Just more of the same.
Trickle down does not work
Fri, 07/16/2010 - 02:06 — Anonymous (not verified)Trickle down does not work because excesses are a waste especially at the expense of not only the poor but the commons which all life relies on.
We must do everything we can
Fri, 07/16/2010 - 05:29 — Anonymous (not verified)We must do everything we can to make sure Max Baucus never returns to politics again for his health care sell out ( which is the equivalent of a massive handout to the rich. Oh yeah, he's a "D")
The problem with tax cuts
Fri, 07/16/2010 - 07:27 — Anonymous (not verified)The problem with tax cuts for the rich is that they are unspecified general cuts that depend on the people getting them to put the money to use creating businesses and hiring employees when in fact more often than not they are used like an earlier poster described. To install a new swimming pool, buy expensive foreign cars, and go on expensive vacations. The cuts would be much more effective and productive in stimulating the economy if they were targeted. An example would be a tax cut worded: A tax cut of X dollars will be granted to each existing employer for each new employee that is an American citizen that the employer hires in the U.S. and keeps employed for a period of at least twelve months. The same tax cut shall apply to anyone who starts a new business for each employee that is an American citizen that they hire in the U.S. and keep employed for a minimum of one year. A further tax cut of X dollars shall be given to any business that buys American equipment made by Americans that is used in the conduct of that business.
I'm sure the "global free traders" will scream about any such tax cut but we have already seen the success of their philosophy for the American citizen and economy with yet another jobless recovery from another recession in which we lost eight million jobs.
Except for a very small
Fri, 07/16/2010 - 13:55 — radline9 (not verified)Except for a very small number of rich people, don't trust them, they are selling out the country.
This article states that the
Fri, 07/16/2010 - 14:13 — hark (not verified)This article states that the purpose of higher taxes on the wealthy is to help those in need.
This is only half the story. The main purpose of higher taxes on the wealthy should be to invest in a 21st century economy, especially an energy and transportation infrastructure. The problem with low taxes on the rich is that they don't invest it, they gamble all that dough they never earned in the first place in the Wall Street casino that produces nothing of value to society as a whole.
We are all missing that point. Our society, since 1987 when the Reagan tax cuts took effect on the rich has failed to invest all that capital in a vibrant, tangible economy. We must take that money back and invest it ourselves through our government.
Where do these lapdogs of
Fri, 07/16/2010 - 14:52 — Tyler_Durden (not verified)Where do these lapdogs of the megawealthy pretend to explain their "funding" for our multi-billion dollar wars?
Oh, right, loans from the chinese. I guess it's not deficit spending if it's our slave laborer partners in crime.
Isn't it just a bit ironic
Fri, 07/16/2010 - 19:34 — Don (not verified)Isn't it just a bit ironic that after YEARS of deficit spending by Bush and the Republican-controlled congress, the conservatives and Teabaggers just now suddenly "get religion" and complain about the deficit?
Why the average voter, 95+% of whom earn less than $200,000, would be worried about the rich paying a few more tax $ (partly to bail out their rich Wall Street friends) escapes me.
When the rich get tax breaks, where does it go? --- not just luxuries but also right into stocks and bonds, which DOES NOT create real jobs, just more profits.
These guys do not know the
Fri, 07/16/2010 - 19:41 — Anonymous (not verified)These guys do not know the fury of the mass anger. Perhaps they have just signed their masters' demise. $billions given to the super rich in the past 10 years through tax cuts, especially estate tax cuts which enabled them pass vast amounts of assets intact to their maggot descendants. Yet the working poor is not allowed to even eat, after their jobs are sent overseas, their assets were robbed by the banks. Now they want them to die from starvation....
Who;e thing makes you think
Fri, 07/16/2010 - 20:24 — gladbag (not verified)Who;e thing makes you think there really is a "conspiracy" going on, doesn't it? As if calling it what it is somehow a) legitimizes it, and b) marginalizes the observation.
Republicans can't govern because they don't like government. They can't run companies well because they lose sight of anything but the profit margin. They have no social awareness, so have no social conscience. If they did, they would understand that the economy seemed to run better with an incentive to plow profits back into their business in terms of jobs, and to make the jobs themselves have rewards for those who did them. Remember company loyalty?
Democrats seem to have a mamby-pamby general idea that robbery of the taxpayer is best achieved through obscurantism, and the appearance of confusion in the ranks. That's just another con.
The Tea Party has become a media joke, whereas at its inception it was a force to be reckoned with because it raised questions for discussion that the two-party system refuses to address. And the questions were asked by a sector of the voting public that has some muscle.
JOBS. That's what the country needs. And a new recognition of the importance of the worker to the economic model.
This Obsession With Taxing
Sat, 07/17/2010 - 01:24 — Bill O'Rights (not verified)This Obsession With Taxing The Rich ignores the surreal fact that most of our nation's income tax revenue goes to pay the INTEREST ONLY on our debt and does not even begin to pay for the myriad Federal programs so beloved by many posters here. The disconnect between revenues and expenses is so large that saying 'not taxing the rich more is gonna cost us trillions' is a joke - look at the numbers. The rich paying 40% income tax (max rate) not high enough for ya? then add in sales tax on everything purchased (another 7-8%), property tax on all real estate and property and businesses they own (another 2% per year, which becomes 100% over a lifetime) fuel tax, various local taxes, hotel taxes, use taxes, excise tax - and then the chunk the govt takes out of the estate when a rich person dies - you are looking at MOST OF THEIR WEALTH for God's sake. The issue here should not be how much income a person makes or how much they have accumulated, but how do we stop the unfair enrichment due to a rigged game and the unfair poverty due to same. It shouldn't require cunning for a working person of average intelligence to accumulate an adequate retirement for themselves - and creating retirement funds via taxation does not create any wealth - it all has to come from somewhere. So, maybe we should remember what Jefferson warned about allowing a central bank, and reconsider the stupid bill that was just passed in the name of 'financial reform' which expanded the Federal Reserve Bank's powers, while leaving it immune from an audit - UNBELIEVABLE. Jefferson warned that such an entity - through the corporations that sprung up around it - would eventually deprive the people of the nation of all their land and all their wealth. So, here we are - griping about the millionaire down the street, who is by now very luke warm about even thinking about hiring anybody in this risky environment, only to be rewarded with higher taxes for their efforts - while ignoring the Global pirates who have literally 1,000x as much and who acquired it through manipulation of the system at the highest levels of government and regulatory bodies while the people on this board are all angry because somebody got a swimming pool (which they hired local talent to build). Read "Web of Debt" and "The Creature From Jekyll Island" to get a grip on our true history, rather than continuing to spout the same Left vs Right nonsense. Given that profound corruption riddles the FDA, our Federal health care system is mostly 'waste' because the very science is tainted and the protocols are essentially bought and paid for due to conflicts of interest. Our Federal Reserve Bank which operates in secret, for God's sake, is profoundly corrupt and has robbed us blind. Our corrupt National Security policy has produced immeasurable suffering and insane spending along with our 700 military bases scattered around the globe (note that Ron Paul has called for the closure of most of these for many years) and ask yourself just how many poor there would be in this country if we didn't have Federal programs that so efficiently fleeced us? This comes down to a difference between local control (good) and centralized control (almost always bad) and is very much affected by the scale of the population. When people are governed from great distance, government tends to drift into profound corruption and oppression - read the Constitution, it was written specifically to eliminate the traps that mankind repeatedly falls into - read the Bill of Rights carefully - every one of them has an important role in protecting the little guy from an oppressive state. And if you think socialism or communism is the way to go, take the time to visit with a former citizen of one of those countries who went to great personal sacrifice and effort to come here, and ask them what they think. They will glare at you like you are an ignorant, gullible fool and they will be horrified that you can vote.
Billorights:former citizens
Sat, 07/17/2010 - 13:23 — Anonymous (not verified)Billorights:former citizens are the best of capitalists selling out THEIR own country.
ALL MY RELATIVES ARE DUMB
Sat, 07/17/2010 - 15:32 — Anonymous (not verified)ALL MY RELATIVES ARE DUMB FOX, SHOCK AND AWE NEWS, FOLLOWERS AND REPUBLICANS.
I AM ASHAMED OF THEM.
But, beyond ranting, what
Sat, 07/17/2010 - 15:53 — granny (not verified)But, beyond ranting, what are you all doing about it? Canvassing? Donating? Working to keep the Repugnican hogs from taking over even more troughs? Come on, people! It's one thing to wring your hands and cry about the REpugs. It's another - and more effective - to get off your righteous duffs and work to save this country.
Anon 13:23, Sure, those
Sat, 07/17/2010 - 15:56 — Bill O'Rights (not verified)Anon 13:23, Sure, those immigrants would have served their societies well to have stayed and fought for a Constitutional Republic as was envisioned here, but I do not begrudge their impatience - life is short, after all - and if you are surrounded by hopeless fools, it makes sense to relocate, perhaps. Those people didn't come here to seek socialized medicine or stimulus programs, I can tell you that - they came to seek opportunity and to live as free people, and not under the big umbrella of a collectivist society. We have been living under the cloud of fear for so long that we have forgotten that human beings are inherently productive and wealth producing on our own - if we take away the parasitic oppression of an over-reaching state, though it's various agencies - all designed to address the various threats, supposedly. Think about many jobs would be available if earners didn't have to fork over half of their winnings to the various state entities (when you add up all Federal and local taxation, it works out to that staggering amount). We live in one great big emergency by now - Economic, Environmental, Terrorist, Pandemic Global Emergencies - all of them have coincidentally sprung up very large, very powerful Global entities to 'save us' from these threats. They are run by unelected officials who are essentially appointed by Global Corporations, who by now run our politicians too. Corporations are the abstractions that embolden people to do the most selfish and irresponsible things and this was not always the case - they have arisen in the shadow of the Central Banks of the world - just as Jefferson warned. We are reduced to a controlled herd - scrapping with each other over the crumbs - exploited by race, economic class, and religious differences, we are beginning to effectively act as one another's wardens - our job is to fight each other, to be in debt, and to never question the authority of these banks. Again, I draw the distinction between the millionaire down the street and the multi-billionaire puppeteers who run the show, including the Federal Government. I would rather work for the Millionaire than be a slave to the state. We must audit the Federal Reserve Bank - keep your eye on the ball - ignore class, race and religious differences and instead focus on ending these wars and restoring the Bill of Rights - all of them. Read the Creature From Jekyll Island and Web Of Debt - find out how we became debt slaves, don't play into the hands of the globalists.