Just in time for the holidays, Congress has terminated unemployment benefits for millions of out-of-work Americans. We’re told this was done as an act of fiscal responsibility, to help prune the gargantuan national deficit.
It’s somewhat revealing, then, to follow another big battle on Capitol Hill. This one centers on the so-called Bush tax cuts, which are due to expire at the end of the month.
Democrats want to keep the lower rates for all Americans except individuals making more than $200,000 a year and couples earning more than $250,000. Republicans want to extend the lower tax rates for everybody, including the wealthy -- their most prized constituency.
The problem with the GOP tax plan is that it would add about $700 billion to the deficit over the next decade. A few years ago this would have been business as usual, because the Bush administration was printing money as fast as the Republican leadership could spend it.
Now, prodded by the renegade Tea Party, guys like Mitch McConnell and John Boehner are born-again penny-pinchers. They’ve rediscovered the deficit, and declared war.
Well, sort of.
A few hundred billion here, a few hundred billion there -- no biggie, right?
Listen to this, from a recent column in The New York Times: “If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing.” The writer is David Stockman, a former GOP congressman and Ronald Reagan’s budget chief from 1981 to 1985.
Stockman says Republicans have abandoned their fiscal principles to embrace a policy that “has amounted to little more than money printing and deficit spending.” He also chides McConnell for asserting that the richest taxpayers shouldn’t be burdened with a relatively modest 3 percent rate hike to reduce the nation’s public debt, which is approaching $18 trillion.
To some people who are suffering in the current economy — with the worst continuing unemployment in three decades — axing jobless benefits while prolonging a fat tax cut for the rich seems not only wrong, but cruel. Even some who aren’t suffering feel the same way.
More than 40 wealthy Americans — including some Google executives and Ben Cohen of Ben & Jerry’s ice cream — have formed the Patriotic Millionaires for Fiscal Strength. On its website, the group has urged President Obama to end the Bush tax breaks for rich folks such as themselves: “For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled.”
Not all millionaires share such a big-hearted view, but it’s refreshing to hear from some who do.
Throughout the mid-term campaigns, many Republican candidates were eager to spread the fiction that taxes had gone up under Obama and the Democrats, when the opposite was true. A sizeable chunk of the Big Bad Stimulus program was a tax refund in middle-class paychecks, which many people haven’t noticed because it has been spread out over time.Another boilerplate lie was that Obama was scheming to do away with all the Bush tax cuts. In truth, under the Democratic proposal, 98 percent of taxpayers would continue paying at the lower rates. Only the wealthiest 2 percent would see their tax scale revert to pre-Bush levels, but that particular 2 percent is near and dear to the GOP.
The result, playing out now in Washington, is that Republicans are threatening to smother all legislation — from the nuclear arms control to food-safety precautions — until the Obama administration caves in on the tax cuts for the rich.Although the president is willing to compromise — raising the minimum annual income threshold from $250,000 to $1 million is one option — the opposition hasn‘t budged. McConnell insists that preserving the tax cuts for top earners will help invigorate the economy, a notion disputed by the nonpartisan Congressional Budget Office and discredited by events of the last three years.
In the interest of disclosure, I’m one of the fortunate taxpayers who will benefit nicely if the Bush rates are kept in place for those in the higher brackets. I don’t donate to political parties or candidates, though it doesn’t seem to matter. McConnell and his troops are fighting tirelessly to get me more money. I suppose I should be grateful, but something doesn’t smell right.
This month alone, two million Americans will see their unemployment paychecks stop, all in the name of cost-cutting for the good of the federal budget. Meanwhile, the so-called deficit hawks want to give away a total of $700 billion to folks like me, who can get along just fine without it. Obscene is the first word that comes to mind. Sad is the second.