This week, Senate Minority Leader Mitch McConnell (R-KY) has been trying to make it abundantly clear that he has no interest in extending the Bush tax cuts for only the middle- and lower-class. In fact, McConnell has drawn up the Tax Hike Prevention Act of 2010 to show how serious about this he really is.
Not only would the bill permanently extend the entire package of Bush income tax cuts, but it adopts a cut in the estate tax that would gift $91 billion to the richest 0.25 percent of households (which also has the support of some Democrats, including Sen. Michael Bennet (D-CO)). McConnell has yet to receive a cost estimate for his package, but the Congressional Budget Office has already scored a similar package, which was astronomically expensive:
The nonpartisan Congressional Budget Office recently forecast that a similar, slightly more expensive package that includes a full repeal of the estate tax would force the nation to borrow an additional $3.9 trillion over the next decade and increase interest payments on the national debt by $950 billion. That’s more than four times the projected deficit impact of President Obama’s health-care overhaul and stimulus package combined.
When asked about this huge hole he blows in the budget, McConnell’s aides say he has a plan to cover the cost:
Asked how McConnell would cover the cost of his proposal, the Tax Hike Prevention Act, aides noted that he has backed a bipartisan plan to freeze spending that would save an estimated $300 billion over the next decade – a drop in the bucket compared with his $4 trillion-plus plan.
As Ezra Klein pointed out, “there is no policy that President Obama has passed or proposed that added as much to the deficit as the Republican Party’s $3.9 trillion extension of the Bush tax cuts. In fact, if you put aside Obama’s plan to extend most, but not all, of the Bush tax cuts, there is no policy he has passed or proposed that would do half as much damage to the deficit.” As The Wonk Room explains, any pronouncement that McConnell makes regarding his fiscal responsibility should be stacked up against this irresponsible tax cut plan.