Last week, a number of House Democrats sent a letter to Speaker of the House Nancy Pelosi (D-CA) stating their objection to allowing the Bush tax cuts for the richest two percent of Americans to expire. Some of these Blue Dogs, who are breaking with President Obama in order to borrow and spend $830 billion on tax breaks for the richest Americans, are relying on discredited Republican arguments to bolster their position.

However, some of them are also claiming that a household earning $250,000 per year isn’t actually rich, once geographic differences are taken into account. “Where we come from, those people are living paycheck to paycheck,” said Rep. Michael McMahon (D-NY).

First, as Daniel Gross ably pointed out, “even if you look at the wealthiest metropolitan areas — Washington ($85,236), San Francisco ($76,068), Boston ($70,334), and New York ($63,957) — a quarter of a million dollars a year dwarfs the median income.” Not only that, but as a new report from Citizens for Tax Justice pointed out, two-thirds of the House Democrats who are looking to preserve the Bush tax cuts for the rich come from districts with a below average number of households making a quarter-million per year:

Of the 31 House Democrats who signed the letter in support of extending the Bush tax cuts for the rich, 22 represent districts where the share of taxpayers rich enough to pay higher taxes under Obama’s plan is less than the national average of 2.1 percent. Of those 31 House Democrats, 13 represent districts where less than 1 percent of taxpayers are rich enough to face higher taxes under Obama’s plan.

Even in McMahon’s district, just two percent of households earn that much. In total, there are only 30 districts (out of 436 in the country) where at least 5 percent of households would be affected by the expiring tax cuts. Just two of those districts are represented by House Democrats who signed the letter to Pelosi.

It’s also worth remembering that those making more than $250,000 would still receive a tax break on their income up to that amount, relative to where their tax rate was in the 1990′s. Under Obama’s plan, a millionaire will still pay roughly $6,300 less in taxes than they would if the entirety of the Bush tax cuts expire. So even the exceedingly few households represented by these lawmakers that would be affected if the Bush tax cuts expire would be keeping some of their tax breaks.

The House Democrats also asserted in their letter that the richest two percent of taxpayers are responsible for 25 percent of consumer spending. However, CTJ noted that these households account for 21 percent of total pretax cash income and “their share of total personal consumption is certainly not higher than their share of total income.” In all, this two percent of taxpayers is responsible for roughly 8 percent of consumer spending, CTJ estimated.

Our guest blogger is Michael Linden, Associate Director for Tax and Budget Policy at the Center for American Progress Action Fund.

Republicans love to say that the deficit is a “spending problem.” It’s their go-to talking point. Of course, when pressed to say exactly what they would cut to solve this problem, they always come up empty. In fact, all House Minority Whip Eric Cantor (R-VA) could come up with when he was asked three times what he would cut from the budget was “we’ve got spending to cut in the short-term, and what we’ve got is a huge problem in the long-term, where we’ve got to get serious about it. You’re absolutely right.”

That’s no accident. The truth is that the vast majority of what the government does is necessary, widely beneficial, popular, or all of the above, which is why Republicans tie themselves in knots to avoid detailing exactly what they’d slash. When they do manage to mention anything specific, it’s usually something silly like rescinding unused stimulus funds (which would have the effect of raising middle class taxes, and wouldn’t have any effect on the deficit beyond next year) or something that wouldn’t actually reduce the deficit at all.

In short, either Republicans don’t really care about reducing spending, or they just don’t want to share their ideas since they’re bound to be incredibly unpopular.

Well, today, the Center for American Progress released a new report that calls their bluff. The new paper, entitled, “A Thousand Cuts: What Reducing the Federal Budget Deficit Through Large Spending Cuts Could Really Look Like,” goes through the exercise of trying to find sufficient spending reductions to get the federal budget to primary balance by 2015. (Primary balance is when total spending, with the exception of interest payments on the debt, is equal to total revenue.) This also happens to be the goal set out for President Obama’s deficit commission.

Getting to primary balance in 2015 will require finding $255 billion in deficit reductions, compared to the president’s most recent budget plan. That’s $255 billion in one year.

Now, we tried our best to find cuts that would be the least harmful to the economy, that would protect the most vulnerable, and do the least damage to our prospects for future safety, security and prosperity. But the simple fact is that cutting $255 billion from the budget requires some pretty draconian measures – big cuts to highway funding, cuts to medical research, the Federal Aviation Association, defense, Pell grants and much more.

So, to all those Republicans who seem to think we can balance the budget purely through spending cuts, here are your only three options:

– You can own the cuts we’ve outlined and say to the public: yes we do need to cut highway funding by 40 percent, and immigration enforcement by 20 percent, and the National Institutes of Health by 10 percent, and all the rest.

– You can submit your own plan in as much detail as we have done – no gimmicks allowed.

– Or you can admit what every sensible person already knows – that balancing the budget is going to require a reasonable mix of less spending and more revenue.

Of course, I guess you could also go with Option 4: continue to obfuscate, avoid ever getting specific, and hope that no one notices. But Option 4 confirms your status as a Deficit Peacock.

Since the Dodd-Frank financial regulatory reform bill was signed by President Obama — officially putting into place the most significant upgrade of the nation’s regulatory structure since the New Deal — various Republicans have threatened to repeal the legislation. Yesterday, at the Reuters Washington Summit, Sen. Richard Shelby (R-AL) said that the Dodd-Frank bill should actually be reopened in order to “overhaul” the newly created Consumer Financial Protection Bureau (CFPB). “The consumer agency bothers me the most,” Shelby said. “I thought the creation of it and the way it was created was a mistake.”

Shelby’s comment comes just a few days after California’s Republican senate nominee Carly Fiorina said that the only specific program she’d cut from the budget is the CFPB. So Republicans seem to be focusing on the CFPB for the moment, but make no mistake, they want to repeal the bill in its entirety:

House Minority Leader John Boehner (R-OH): I think it ought to be repealed. [7/15/10]

Rep. Mike Pence (R-IN): We need to repeal this new Big Government program. [7/21/10]

Senate candidate Dino Rossi (R-WA): We need to repeal that bill. [7/27/10]

Sen. Jim Inhofe (R-OK): Well yeah. I’m not saying I can, but the answer is yes [I would repeal it]. [8/13/10]

Sen. Saxby Chambliss (R-GA): I’d love for it to be repealed. [7/16/10]

Rep. Michele Bachmann (R-MN): The financial reg reform bill should be repealed. It’s a disaster. [7/27/10]

The CFPB (then known as the Consumer Financial Protection Agency) was the part of the bill most vilified by Republicans during the financial reform debate, as they falsely portrayed it and its director as empowered to deny credit products to middle-class households. It makes sense, then, that they would use the Bureau as the spearhead of their push for repeal, even though the agency fixes a critical gap in the regulatory structure and is the part of the bill that will likely have the greatest tangible benefit on peoples’ daily lives.

And a repeal campaign might not resonate with the American public. According to a Gallup poll released this month, the regulatory reform bill is the only piece of legislation passed by the current Congress of which a majority of Americans approve. In fact, 61 percent say that they approve of the bill, including 62 percent of independents.

Plus, even threatening to reopen the bill, according to bank regulators, raises the prospect of more regulatory uncertainty, which Republicans are constantly claiming they want to eliminate. “I think to go back and completely reopen it now with a whole other set of question marks and uncertainties about what people are supposed to be doing, I hope people would think hard about that,” said FDIC chair Sheila Bair.