Morphing the Bush-era tax cuts into a new economic stimulus?
Facing a backlash from the left, the Obama administration on Monday defended the deal it cut with Republicans to extend all of the Bush-era tax cuts by characterizing the plan as a stimulus package.
Granted, administration officials didn't use that exact phrase in a conference call with reporters Monday afternoon. But they made the point repeatedly that the "framework of a deal" accepted by both sides includes well over $175 billion in stimulative tax cuts and spending increases, in addition to the two-year extension of all the Bush-era tax cuts.
These include:
- Cutting the payroll tax paid by workers by nearly a third, from 6.2% of wages to 4.2%, for one year (estimated cost: $120 billion)
- Renewing for 13 months the extended unemployment benefits that expired Dec. 1 (estimated cost: $56 billion)
- Allowing businesses to write off 100% of their equipment purchases in 2011, followed by an additional year of a higher depreciation allowance (no cost estimate available).
Those are good policies, and they make more sense economically than extending the Bush-era tax cuts for the wealthiest Americans. But other elements of the plan smack of the two sides using the slow economy as a pretext to extend every temporary tax cut on the table. For example, administration officials said the deal calls for a two-year extension of the American Opportunity Tax Credit, which allows students to write off more tuition costs. That won't stimulate the economy as much as it will advance an administration priority, to wit, enabling more Americans to go to college. (Not that there's anything wrong with that.)
The administration's spokespeople also stressed how much President Obama opposes parts of the deal he just signed on to -- in particular, extending the lower rates on the top two tax brackets and adopting the GOP position on the estate tax (a 35% rate, but only on estates larger than $5 million). Those provisions expire in two years, meaning they will become issues in the next presidential campaign. Given how well Democrats handled the Bush-era tax cuts in the run-up to the midterm election, that hardly seems like an advantageous position for them in 2012. But unemployment should be lower then and the economy better, so at least the backdrop will be different.
Related:
Obama announces compromise on extending tax cuts
The deficit commission: close, but no deal
-- Jon Healey
Credit: Jewel Samad / AFP/Getty Images
** How do you pay for tax cuts for the wealthy ?
1. First attempt : threatening Social Security and Medicare Cut through the deficit panel.
2. Second attempt : holding the desperate Hostage, say, the Ransom.
How long will it take for Obama to learn that we think compromise is a synonym for unconditional surrender, or another Bush-era?
** The deal based on the outright lies and supportive Dead Media will lead to another Bush-era & irreversible RECESSION.
1. The reps uses the recession as an excuse for tax cuts for the wealthy.
THIS IS A MIDDLE CLASS RECESSION.
2. The Republican Senate minority leader has been arguing that the outcome of the midterm elections confers a mandate on Congress to extend the Bush-era tax cuts.
"There's bipartisan opposition to raising taxes on anyone at this time."
(a). Only 34 percent of Americans believe that tax cuts ought to be extended for those households making more than $250000 a year, according to a new CNN poll.
(b). A recent CBS News poll indicated that Only 26 percent indicated they support extending the tax cuts for all Americans regardless of income level
(c). In the AP-CNBC poll, 34 percent favor extending the tax cuts for all Americans.
(d). A recent Gallup poll found 40 percent favor maintaining the Bush-era tax cuts for all Americans.
3. The reps road the waves of deficit reduction just 2 months ago.
Now, 2 months later they are set to increase the deficit and increase the governments debt ceiling just so they can give themselves and their rich pals more money.
This isn't what Americans voted for.
4. Tax cut for small businesses.
A small business bill was blocked for weeks by a republican filibuster in the Senate.
5. Tax cut for job creation.
(a). There is no evidence that the tax cuts created even a single job.
Back when Bush was pushing his tax cut packages through Congress in 2001 and 2003, supporters said the cuts (which weren't balanced with spending reductions) would initiate an era in which the American economy would grow so robustly the nation would be running a surplus of more than $5 trillion at the scheduled expiration date. U.S. now runs a deficit of about $1.3 trillion.
In fact, the available evidence is the exact opposite:
Former President Bill Clinton left a record surplus and created 20 million jobs, despite the warning of potential economic disaster over tax increase for the wealthiest.
(b). Your Waterloo = our windfall.
Even when the economy was on the cusp of entire collapse just like Lehman Brothers ahead of the roll-out of stimulus package, it was held hostage by Audacity of Nope, and the time was running out.
Power first then said : Nope ! How do we pay for it ?, Just let it go under exactly like Lehman Brothers.
6. The GOP along with Big Business bought this past midterm election.
The structure that the last champion is authorized to pick the next match winner .
The ruling that allowed Corporate money to back Political Candidates destroyed the very fabric of the Elections and Americans are paying dearly for it.
The incessant barrage of negative campaign ads drove most Americans towards something they knew nothing about, the Republican/Corporate take-over of the US. Millions upon millions were spent to defeat certain Democrats.
7. From my perspective, Communism & extreme Capitalism have one thing in common : Power First, Corruption at the cost of people !
Posted by: hsr0601 | December 06, 2010 at 05:54 PM
LOL. Ironic. The 'Bush' era tax cuts, now become the Obama 'one term' tax cuts.
'Read My Lips. No Tax Cuts For The Rich'... oops.
Posted by: Pasquino Marforio | December 13, 2010 at 09:22 PM