Tag Archives: job creation

Making Sense of the Tax Cut Extension Contradictions

11 Saturday Sep 2010

Posted by in Congress, Democrats, economy, lobbyists, Obama, Politics, Republicans, special interests

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A couple of things don’t make sense in this debate over letting the tax cuts for the top 2% expire. Don’t make sense on the surface, that is. Dig a little deeper and it becomes perfectly clear.

Why is there such angst in Congress about raising taxes on the wealthy? Members of both the House and the Senate in both parties say they are so concerned with the deficit, but yet extending the cuts will add about $700 billion to the deficit. Many say raising taxes will kill job creation, but those same cuts led to little or no job creation during the 9 years they have been in effect. So what’s the big deal about raising taxes on millionaires?

Because they would be voting to raise taxes on themselves. One percent of Americans are millionaires, but 44% of the members of Congress are millionaires—237 out of 535. They would be voting not only to raise taxes on themselves, but their friends, their associates, and most importantly to them, the people who write the large campaign contribution checks.

Here’s the other thing that doesn’t appear to make sense. Naturally, most Republicans are against letting the cuts expire, for no other reason than that President Obama is in favor of it. But why are an increasing number of Democrats coming out in favor of an extension? Besides the fact that many if them are included in that number of millionaires, that is.

I know some probably get tired of me beating the drum for the importance of organized labor, but unions were once the largest constituency group and voting bloc who stood up and spoke out for working and middle-class people. Into the “vacuum” left by decreasing union membership and its influence on politicians and policy has stepped corporate interests and their money. From Winner-Take-All Politics via Kevin Drum at Mother Jones:

“Unions…are the particular focus of business animus. As they decline, they leave a vacuum. There’s no other nationwide organization dedicated to persistently fighting for middle class economic issues and no other nationwide organization that’s able to routinely mobilize working class voters to support or oppose specific federal policies.

With unions in decline and political campaigns becoming ever more expensive, Democrats eventually decide they need to become more business friendly as well. This is a vicious circle: the more unions decline, the more that Democrats turn to corporate funding to survive. There is, in the end, simply no one left who’s fighting for middle class economic issues in a sustained and organized way. Conversely, there are lots of extremely well-funded and determined organizations fighting for the interests of corporations and the rich.”

In my opinion, this also explains why some who vote Republican and support Republican policies, other than those who are simply anti-anything Obama related, are against raising taxes on the wealthy even though very few would be affected by an increase on those making over $250,000 a year. They’ve bought into the corporate-interest saturated media theme that unions are evil and that the wealthy special interests are looking out for them.

A $3.8 Trillion Republican Tax Hike

29 Thursday Jul 2010

Posted by in budget, Congress, Conservatives, economy, Politics, Republicans

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Before House Republicans left Washington for their August recess yesterday, Rep. Mike Pence handed out his 22-page plan for how Republicans can disseminate their propaganda get their message out to voters over the break.

“The recess document…lays out key topics to address in the dog days of August and early September: “Week One: Jobs. Week Two: Government Reform. Week Three: Spending. Week Four: National Security. Week Five: Healthcare. Week Six: JOBS.”

[…]

Under the heading “Job Creation,” Republicans call the expiring tax cuts, set to lapse at the end of this year, a Democratic plan “on increasing taxes by $3.8 trillion.”

Job creation? If I were a Democratic strategerist, I would have every candidate carry a copy of this chart, and every time a Republican parroted how tax cuts create jobs, throw it in their face and say, ‘Really? What happened here?’.


About the alleged Democratic plan to increase taxes–wrong again. If President Obama and the Democrats did nothing, if they extended none of the tax cuts (which isn’t going to happen, but for the sake of argument say it did) the tax increase would be a Republican tax hike, not a Democratic one. Republicans wrote the tax cut legislation, and a Republican president signed it into law—with an expiration date. Why? Because they had to pass the cuts through budget reconciliation and that required a little sleight of hand trickeration. Ezra Klein explains:

“In order to maximize the size of the cuts, Republicans had to minimize the influence of minority Democrats on the package. So they chose to run the bill through the reconciliation process.

But that posed some challenges. Budget reconciliation had never been used to increase the deficit. In fact, it specifically existed to decrease the deficit. That’s why one of its rules was that you couldn’t use it to increase the deficit outside the budget window. Republicans realized they could take that very literally: The budget window was 10 years. So if the tax cuts expired after 10 years, they wouldn’t increase the deficit outside the budget window. They’d also have the added benefit of appearing less costly in the Congressional Budget Office’s estimates, as the CBO duly scored them as expiring after 10 years, which kept the long-range budget picture from exploding.

But the plan was never to have the tax cuts expire. Instead, the idea was that people would get used to the new tax rates, and no future Congress would want to allow a big tax increase, so when the time came, either Republicans in office would extend the cuts or Republicans in the minority would hammer Democrats until they extended them.”

Which is exactly what they’re doing now.

And when Republicans get to their faux concern about the national debt, present them with this. Two economic scenarios–one with the cuts expired and one with the cuts extended:


Oh, but I forgot. Tax cuts don’t count against the debt, just unemployment benefits. Never mind.

Obama and Axelrod’s Mixed Messages

12 Monday Jul 2010

Posted by in Congress, Democrats, economy, Obama, Obama administration, Politics, Republicans

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To whom it may concern at the White House and the DNC:

If you want to lose the House and possibly the Senate in November, if you want to increase the possibility of the 2 most dreaded words in the English language—President Palin—becoming a reality in 2012, keep the lack of a cohesive message coming. And keep on waiting for the GOP to get on board.

First have President Obama come out on a Thursday with a speech focusing on job creation—saying how we can’t afford to give the keys back to the Republicans because they’re the ones whose policies “gave us the economic crisis” and drove the economy into the ditch. This is called firing up the base for the upcoming mid-term elections. (BTW, mid-term elections are all about turning out the base, and in case you haven’t noticed the Republican base is ready to vote today).

Then have David Axelrod go on This Week on Sunday and say that “there is no great desire on Capitol Hill” for more spending to stimulate the economy and that “we’re hoping we can persuade enough people on the other side of the aisle to put politics aside and join us.”  This makes your base throw up their hands (or just throw up) and say ‘For cryin’ out loud, somebody get a freakin’  clue. The Republicans don’t want anything that resembles economic growth, now or in the next 2 years. When are you guys gonna get it?’

Here are some steps you might want to consider and some advice you might want to listen to. First from Atrios:

“So let’s say Obama’s people have correctly deduced that there’s no chance in hell of getting anything through Congress. They have two basic options. First, they could get on the teevee every day and say, “This is my plan to help. Republicans in Congress won’t pass it.” They could hold rallies in Maine. Allies could run ads. At least people would know who is for and who is against…and just what it was that people are for or against.”

Option two is back off proposals you’ve previously made and have Axelrod get on the teevee and say, “there is some argument for additional spending in the short-run to continue to generate economic activity.”

Paul Krugman adds:

“I have no idea what they’re thinking. It would be one thing if polls suggested a tolerable outcome in November, so that playing it safe could possibly make sense as a political strategy. But that’s not the way it is; and it’s hard to see what possible motivation there is for pulling punches.”

Steve Benen at Washington Monthly:

“My sense is that President Obama really hates — and actively avoids — picking fights he fully expects to lose…The defeat would leave him weaker, exacerbate intra-party tensions, and at the same time signal that the White House lacks confidence in the strength of the economic recovery.

But the current alternative is far worse, especially given the fact that the White House should lack confidence in the strength of the economic recovery. It makes a lot more sense to push an ambitious jobs bill — like, now — invite Republicans to do what they always do, give Democrats something to fight for, and have the debate.

[…]

Yes, Republicans will block any measure intended to improve the economy, and it’s largely too late for a new stimulus effort to boost the economy before November. But it’s still worth having the fight — force the GOP to stand in the way of job creation, and show the public that Democrats are prepared to fight to improve on an unsatisfactory status quo.”

To sum up, you’re quickly approaching (if not already at) ‘nothing to lose’ stage. In sports terminology, this is not the time for basketball’s 4-corner offense or football’s prevent defense. (Long-time Houston fans can tell you how both of those work out, and it ain’t good. See UH–NC State and Oilers vs. Buffalo Bills). For those who don’t follow sports, let’s go with “faint heart never won fair maiden.” And faint heart never kicked the shit out of an obstructionist Republican either. It’s time to go bold and force the other team to re-act to you, not you to them.

Just my $0.02.