According to a spokesman quoted in today’s Wall Street Journal, Senate Majority Leader Harry Reid (D-NV) plans to address the scheduled expiration of the Bush tax cuts in September. The goal, which President Obama campaigned on, is to renew the cuts for the lower- and middle-class while allowing the cuts for the rich to expire.
Republicans, meanwhile, are throwing their full weight behind renewing the cuts for the rich, with many stating on the record that extending those cuts shouldn’t be paid for. (Extending the cuts for the wealthy is subject to pay-go rules, meaning that pay-go would have to be waived in order to pass the extension without paying for it.) In fact, Rep. Mike Pence (R-IN) said over the weekend that House Republicans will throw “everything we’ve got” into extending the tax cuts for the rich.
But just one day before promising to go to bat for the rich, Pence was excoriating the Obama administration about the deficit. “This year alone the deficit is projected to surpass last year’s record and soar to $1.47 trillion,” Pence said. “We cannot continue to postpone the hard choices and sacrifices that are necessary to stop this fiscal train wreck.”
Of course, Pence’s preferred outcome when it comes to tax cuts would add at least $678 billion to the deficit, while only benefiting the richest two percent of the country. Inclusive of debt-service costs, it’s closer to $800 billion. And Congress would have to waive the pay-go law that Democrats worked to put in place in order to do it.
This all combines to make Pence the epitome of a deficit peacock: scaremongering about the deficit to score political points, but fundamentally disinterested in taking the necessary steps to rein in the deficit. Allowing the tax cuts for the wealthy to lapse is a common sense first step in getting the long-term structural deficit under control (as the Bush tax cuts are one of its primary drivers), but Pence scoffs at the very idea.
As Treasury Secretary Tim Geithner said on Meet the Press yesterday, “I think it is fair and good policy to allow those tax cuts that only go to two to three percent of the highest earners in the country to expire as scheduled.” Geithner added that “we have to make sure we can continue to earn confidence around the world that we’re going to have the will as a country to bring these large inherited deficits down over time to a much more manageable level.”
Incidentally, in the same speech in which he proved his complete lack of concern about the deficit, Pence also tried to claim that Democrats favor allowing all of the Bush tax cuts to expire at the end of the year. Politifact rated his statement “false,” adding that it “verges on a scare tactic.”