Yesterday, the fiscal year 2011 budget confirmed, once again, that the Obama administration intends to allow the Bush tax cuts for the wealthiest Americans to expire on schedule at the end of the year. Of course, this has set off the predictable round of moaning from the likes of the Wall Street Journal, Fox News, and conservatives in Congress.
It’d be one thing if the parties advocating for permanent tax cuts recognized that allowing the expiration to occur would help address a portion of the country’s trouble with long-term deficits. But instead, we’re getting the likes of Sen. Chuck Grassley (R-IA), who during a Senate Finance Committee hearing on the budget today, spent half his time slamming the deficit and the other half warning against any tax increase at all, including allowing the Bush rates on the wealthy to expire:
Over the past year, with the levers of power all concentrated in the hands of those on the other side, we’ve seen the fiscal path worsen. Deficits, as you see, are up, and debt is up…Look at the budget and you’ll see a big fiscal hole…My advice, and this is to the President on down: listen to what small business is saying. Back off the marginal rate tax hikes, don’t bury recovering small businesses with new taxes and penalties. Be cognizant of the tax burden that you are raising on capital.
Watch a compilation:
Now, Grassley did tell Fox News’ Greta Van Susteren that even tax increases five years from now would harm economic recovery (at which point, if the economy is still so weak that it can’t handle a tax increase on the very wealthiest, we’re in much deeper trouble), so that’s the mindset we’re dealing with. But the Center for Budget and Policy Priorities detailed the extent to which allowing the cuts to expire can help with deficit reduction:
Allowing tax cuts to expire for married filers with incomes above $250,000 and single filers with incomes above $200,000 — the top 2 percent of U.S. households — will avert $826 billion in added deficits and debt over the next ten years. The savings from allowing the top two marginal tax rates to expire for those high-income households constitute $443 billion of that $826 billion. There is broad consensus among economists and fiscal policy analysts that the deficit and debt levels the government will experience if current tax and spending policies are continued will ultimately be harmful to the economy.
CBPP also pointed out that continuing these tax cuts are the absolute worst way to boost the economy or create jobs, and once again debunked the notion — put forth by Grassley — that allowing the tax cuts to expire will hit many small businesses with a tax increase.
In an op-ed yesterday, Grassley asked whether or not “lawmakers have the political will to take on the trillion-dollar budget deficit.” It’s fairly clear that he doesn’t, but that doesn’t stop him from complaining about them anyway.