July 16 (Bloomberg) -- Dean Baker, co-director of the Center for Economic and Policy Research, and Douglas Holtz-Eakin, a member of the Financial Crisis Inquiry Commission, talk with Bloomberg's Peter Cook about the potential expiration of tax cuts enacted by President George W. Bush.
Holtz-Eakin was also McCain economic adviser during the 2008 presidential campaign. Former Federal Reserve Chairman Alan Greenspan, whose backing of the tax cuts helped persuade Congress to pass them, said lawmakers should allow the reductions to expire as scheduled at the end of this year.
Raising taxes is usually a perilous move. But Democrats, facing the potential loss of their majorities on Capitol Hill, believe that the strategy will both force Republicans to defend tax breaks for a tiny, wealthy minority and expose GOP hypocrisy on budget deficits.
The cuts, enacted under President George W. Bush, are set to expire in January. Given partisan gridlock in the Senate, congressional aides and administration officials acknowledge that lawmakers could run out of time, leaving virtually every American taxpayer with a significantly higher bill in 2011.
Although they have blamed Democrats for record budget deficits, most Republican lawmakers want to extend all of the tax cuts, adding at least $2 trillion over the next decade to the national debt. President Obama and senior Democrats want to extend the cuts only for families making less than $250,000 a year.
"This blows a hole in their argument that they're deficit hawks. They're not deficit hawks; they're deficit chickens," said Rep. Chris Van Hollen (Md.), who heads the Democratic Congressional Campaign Committee, which is tasked with defending the party's House majority.
Republicans say the tax cuts are critical to bolstering a feeble economic recovery. And with unemployment at 9.5 percent, even some Democrats are queasy about raising taxes on high earners. The top income tax bracket category includes some small-business owners while policymakers are trying to encourage them to create jobs.
On Saturday, Obama pressed the attack in his weekly radio address, criticizing House Minority Leader John A. Boehner (Ohio) for urging repeal of Obama's health-care initiative and vowing to "permanently keep in place the tax cuts for the very wealthiest Americans -- the same tax cuts that have added hundreds of billions of dollars to our debt."
"These are not new ideas. They are the same policies that led us into this recession," Obama said. "They will not create jobs; they will kill them."
Rightardia comment: The Bush tax cuts did little to improve the economy and the presidential promises to reduce the deficit and national debt did not occur. In fact, the deficit doubled and the national debt increased by $4 trillion. Bush also had the worst jobs creation record of any president since 1950.
The GOP got its shot using Supply Side economics and the economic experiment failed. It's time to throw out the Bush tax cuts with the bath water.There is no evidence that the Bush tax cuts provided significant benefits to the American economy.
source: http://www.washingtonpost.com/wp-dyn/content/article/2010/07/24/AR2010072402428.html?hpid=topnews
source: http://www.laborradio.org/node/13902
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