In a press conference this morning, Sen. Mitch McConnell (R-KY) discussed his objections to President Obama’s stimulus package currently before the Senate. McConnell expressed his concerns over the long term cost of the plan, because “we are already looking at, before we even do this, at over a trillion dollar deficit for this year”:
Most of my members believe that we could pass a very robust stimulus for less than the amount currently before us. We have been throwing figures around like it was paper money. We are already looking at, before we even do this, at over a trillion dollar deficit for this year. We all agree that we need to do something, but I don’t think we should not just completely act like the amount is irrelevant.
McConnell is not alone in trotting out this argument. Sen. Jim DeMint (R-SC) has also railed against increasing the deficit to pay for measures that won’t act as effective economic stimulus, saying that the current stimulus plan is “arrogantly indifferent to economic reality.”
The only comprehensive alternative being offered by Senate conservatives is DeMint’s “American Option: A Jobs Plan That Works,” a series of permanent tax breaks for corporations and wealthy Americans. A new analysis from the Center for American Progress Action Fund finds that the DeMint plan would cost over $3.1 trillion over ten years — more than three times the amount of President Barack Obama’s plan — and be largely ineffective at creating jobs.
The DeMint plan includes permanently cutting the corporate tax rate, totally eliminating the Alternative Minimum Tax, lowering income tax rates for the wealthiest Americans, and eliminating scores of tax deductions that help students pay for college, sick families pay medical bills, and teachers purchase supplies for their classrooms.
Permanent tax cuts are one of the least effective ways of stimulating the economy according to both Moody’s Economy.com and the Congressional Budget Office. Furthermore, slashing government revenues this permanently would leave deep structural deficits for generations to come.
McConnell is fond of saying that a stimulus bill should be “timely, temporary, and targeted.” The plan Senate Republicans are backing, though, fulfills none of these criteria.