"Boehner Falsely Claims The Bush Tax Cuts Led To Jobs And Growth, Not Deficits"
Earlier today, Rep. John Boehner (R-OH) told TPMDC that he thinks it’s appropriate for taxpayers to foot at least part of the bill for cleaning up BP’s oil spill in the Gulf. But that wasn’t his only misstep today, as he also managed to produce the absurd claim that the Bush tax cuts didn’t help produce the deficits that the country is currently facing, but that they actually boosted growth and employment:
“It’s not the marginal tax rates…that’s not what led to the budget deficit,” he told reporters, adding, “The revenue problem we have today is a result of what happened in the economic collapse some 18 months ago”…He also said that slashing marginal tax rates has actually buoyed revenue levels. “We’ve seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment and more people paying taxes,” he said.
There’s so much wrong here that it’s hard to know where to begin. But for starters, the Bush tax cuts played a huge role in our short-term deficit, and they are one of the primary drivers behind our long-term deficits. As the Center on Budget and Policy Priorities pointed out, the Bush tax cuts will cause $3.4 trillion in deficits over between 2009 and 2019. In fact, “just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019.” (See chart at right.)
And for Boehner to claim that the giant tax cuts, which predominantly benefited the already wealthy, contributed to a growing economy and more employment is laughable. In fact, as Josh Picker found, following the Bush tax cuts, the country “registered the weakest jobs and income growth in the post-war period”:
Overall monthly job growth was the worst of any cycle since at least February 1945, and household income growth was negative for the first cycle since tracking began in 1967. Women reversed employment gains of previous cycles. And for African Americans, the worst job growth on record was matched by an unprecedented increase in poverty.
As for economic growth, GDP increased faster following the tax increases of 1993 than following either the Bush or Reagan tax cuts. In fact, “over the seven-year periods after each legislative action, average annual growth was 3.9 percent following 1993, 3.5 percent following 1981, and 2.5 percent following 2001.”
Yesterday, Federal Reserve Chairman Ben Bernanke chided House Republicans who want to start cutting spending immediately (despite 9.7 percent unemployment), “because the economy is still in recovery mode and needs that support.” But its no surprise that House Republicans want to take such destructive steps, since even their leader is completely disconnected from economic reality.