Last week, we wrote about the House GOP’s bad medicine for the economy. Today, on the 10th anniversary of the Bush tax cuts no less, we have something far worse to present: former Minnesota Gov. Tim Pawlenty’s plan for the economy. Pawlenty’s plan wins the triple crown: it’s more radical than Ryan, costs three times more than the Bush tax cuts, and still means a tax increase on the middle class. Here are the main points of the Pawlenty plan, which he outlined in a speech this morning in Chicago:
- A hidden tax increase on the middle class
- A massive personal income tax cut for millionaires and billionaires; Citizens for Tax Justice estimates the plan cuts millionaires’ taxes by at least 41%
- A massive tax cut for corporations — including Big Oil — that would cut the corporate rate by more than 50%
- A complete elimination of the estate tax, capital gains tax, and tax on dividend income
- A cap on total spending that would necessitate severe cuts to Social Security, Medicare, Medicaid, and other government programs (except for defense, which Pawlenty has taken off the table in favor of slashing Social Security instead)
The price tag for all of these tax cuts? More than triple the cost of extending just the Bush tax cuts: a whopping $7.8 TRILLION over 10 years, according to the Center for American Action Progress Fund’s director for tax and budget policy, Michael Linden. And that comes in addition to the $2.5 trillion that a full extension of the Bush tax cuts would also cost.
The early reviews for the plan have not been kind. On the progressive side of the ledger, Ezra Klein of the Washington Post wrote:
This plan isn’t optimistic. It isn’t a bit vague. It’s a joke. And I don’t know which is worse: The thought that Pawlenty knows that and went forward with this pandering, fantasy-based proposal anyway, or the thought that he doesn’t know it, and he really thinks this could work.
The Washington Post’s conservative blogger, Jennifer Rubin, also panned the plan:
I love tax cuts as much as the next conservative, but it takes a leap of imagination to suppose that the huge tax cuts are going to generate such growth as to come close to generating revenue sufficient even for a sharply pruned federal government. In sum, this may be an attractive pro-growth plan, but it is not a very serious budget policy.
Georgetown University Professor Adam Levitin put it pretty succinctly in his headline:
Tim Pawlenty’s Plan to Destroy the World
While Ezra Klein is right that the Pawlenty plan is entirely unserious, the impact it would have on everyday Americans is no laughing matter. There’s a lot in the plan, so let’s boil it down to what matters most: the middle class will pay more in taxes and won’t have anything resembling Social Security and Medicare to rely on, all while the very richest Americans and largest corporation will pay even less in taxes than they do now.
How egregiously slanted toward the richest Americans is the Pawlenty plan? Billionaire hedge-funders would pay virtually nothing in taxes thanks to the permanent exemption the plan would give to their income, they could pass on that wealth tax-free when they die, and those who inherited it could continue to live off of it — without ever paying any taxes on that income.
In short, if you thought the Ryan plan to end Medicare in order to pay for tax breaks for the wealthy and Big Oil didn’t go far enough, then you’ll love the much more radical Pawlenty plan.
Evening Brief: Imporant Stories That You May Have Missed
2012 GOP presidential hopeful Jon Huntsman isn’t worried about losing support from social conservatives over his backing of civil unions: “Some people will hold that against me, like maybe other issues. But I think some people will say, ‘That sounds right to me. That sounds fair.’”
Conservative British Prime Minister David Cameron promises not to create an “American-style” private health care system.
Republicans pull a bait-and-switch on taxes.
Lots of Dodd-Frank financial reform deadlines are being missed.
Lady Margaret Thatcher will not meet with Sarah Palin because “Sarah Palin is nuts.”
The Club for Growth says Mitt Romney has “developed an unshakeable reputation as a flip-flopper.”
Former Sen. Evan Bayh (D-IN), who said he retired because of the corrosive influence of money on politics, has been hired as a U.S. Chamber of Commerce spokesman.
Activists march on Blair Mountain, West Virginia to preserve this labor-union landmark from mountaintop removal.
Bad Party Tricks: Al-Qaeda Urges Muslims in America to Use Gun Loopholes to Arm Selves, Attack “Enemies of Islam”
The National Rifle Association opposes banning those on the terror watch list from buying guns and its opposition to closing the so-called gun show loophole (the ability of you, me, the nearest criminal, or mentally ill person to simply march down to a local gun show and buy a weapon without any kind of background check) is well known.
There’s another well-known organization that also doesn’t want these loopholes closed any time soon: Al-Qaeda. In a message released last week, their American-born spokesman urged potential terrorists to exploit the loopholes. ThinkProgress’ Ben Armbruster has the details; check out the video:
#Winning: Nobel Prize-Winning Fed Nominee Bows Out Due to GOP Obstruction
First, noted economist Peter Diamond was nominated by President Obama for a seat on the Federal Reserve Board of Governors. The Senate GOP, especially Senator Richard Shelby (R-AL), blocked his nomination, saying he was not sufficiently qualified. Then last year, as his nomination languished, Diamond received something you don’t just find in a box of Crackerjacks: the Nobel Prize in Economics.
Naturally the GOP then let his nomination cruise through, especially since his area of expertise is unemployment, right? Wrong. The GOP continued to claim he was simply not qualified.
Last week, Diamond apparently grew tired of the GOP’s game-playing and withdrew his nomination, but not before writing a scathing op-ed attacking the GOP:
[W]e should all worry about how distorted the confirmation process has become, and how little understanding of monetary policy there is among some of those responsible for its Congressional oversight. We need to preserve the independence of the Fed from efforts to politicize monetary policy and to limit the Fed’s ability to regulate financial firms.
Concern about the (seemingly low) current risk of future inflation should not erase concern about the large costs of continuing high unemployment. Concern about the distant risk of a genuine inability to handle our national debt should not erase concern about the risk to the economy from too much short-run fiscal tightening. […]
Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better. I had hoped to bring some of my own expertise and experience to the Fed. Now I hope someone else can.
2012 Watch — Herman Cain: Gays In, Muslims (Still) Out
For two months now, rising GOP star Herman Cain has been taking heat for telling ThinkProgress that he would not appoint Muslims to his cabinet (which would be unconstitutional, incidentally). When ThinkProgress caught up with Herman Cain in Iowa yesterday, we asked him what he thought of appointing gays to his cabinet. Turns out he was all for it — because, he said, gays won’t try to impose Sharia law. This video, from ThinkProgress’ Marie Diamond, is quite a doozy: