House Minority Leader Nancy Pelosi (D-CA) issued a statement Wednesday calling for a permanent extension of the Bush tax cuts for the middle class, demanding House Speaker John Boehner (R-OH) schedule a vote on the plan as soon as possible. But her proposal differs from others offered by Democrats, including President Obama, that call for an extension of the rates for incomes below $250,000. Instead, Pelosi wants a permanent extension of the Bush tax cuts for incomes up to $1 million, the statement said.

“Democrats believe that tax cuts for those earning over a million dollars a year should expire and that we should use the resulting revenues to pay down the deficit,” Pelosi said. Her plan, however, would cost the government billions in revenue compared to Obama’s plan, and though she has billed it as a tax cut for the middle class, half of its benefits would go to millionaires, according to analysis from Citizens for Tax Justice:

CTJ’s preliminary estimates show that Obama’s proposal to extend the Bush tax cuts for the first $250,000 or $200,000 of income a taxpayer makes would save between $60 billion and $70 billion in 2013 compared to the GOP proposal to extend all the tax cuts, depending on economic conditions. Leader Pelosi’s proposal to extend the Bush tax cuts for the first $1 million of income would save 43 percent less revenue than Obama’s proposal.

The additional tax cut that would result from Pelosi’s plan compared to Obama’s plan (the additional tax cut resulting from extending the Bush tax provisions for taxpayers’ first $1 million of income instead of “just” their first $250,000 or $200,000 of income) would not be targeted towards the “middle class.” In fact, 50 percent of this additional tax cut would go to taxpayers with adjusted gross income (AGI) in excess of $1 million.

Millionaires would continue to benefit under Pelosi’s plan because the tax cut applies to the first $1 million of their incomes, meaning their tax cut would still be substantially larger than it would be for actual middle class workers. And as a result, a large portion of the Bush tax cuts for the rich, which blew up the national debt and failed to deliver on promises of job creation and economic growth, would exist in perpetuity.

House Republicans will today finalize their deficit reduction plans as required under the Budget Control Act, the deal reached last August to raise the nation’s debt ceiling. The deal required cuts to both domestic discretionary and military spending, but the GOP quickly reneged on that plan, choosing to cut more from programs for the poor to preserve the nation’s bloated defense budget.

Under the Republican plan, millions of Americans would lose access to services they depend on. Nearly two million would lose food assistance through the Supplemental Nutrition Assistance Program (SNAP); at least 750,000 would lose access to health insurance from cuts to Medicaid and the Affordable Care Act; and 23 million would be affected by the repeal of the Social Services Block Grant, which helps fund child care and disability assistance to low-income Americans, among other programs.

As the following graphic shows, however, the GOP’s deficit reduction hysteria is little more than an effort to gut social programs while protecting massive tax breaks for the wealthiest Americans:

The number of Americans affected by the Republican cuts is actually higher than the graphic shows. While the GOP plan kicks 2 million people off of food assistance, all 47 million who receive SNAP payments will see reductions in benefits. The estimated number who will lose health insurance under the Republican plan is likely higher, and the number of Americans affected by the repeal of the Prevention and Public Health Fund is unknown. Cuts to financial regulatory agencies like the CFPB will also affect an untold number of Americans.

While Republicans push these cuts in the name of righting America’s balance sheet and staving off a debt crisis, their efforts are miniscule compared to their push to extend budget busting tax cuts for the rich. By promising last week that they will offer a full extension of the Bush tax cuts — at a 10-year cost of $2.4 trillion — without offsetting the cost, GOP leaders assured Americans that their deficit-reduction efforts will never be achieved.

Since taking control of the House, Republicans have pushed to offset the costs of everything from emergency disaster relief to unemployment benefits and tax cuts for the middle class. Their singular goal, they have said, is to cut the deficit and debt, and they’re willing to gut social safety net programs, including Medicare, to do it.

When it comes to the budget-busting Bush Tax Cuts, however, the story changes. Both the 2001 and 2003 versions of the Bush Tax Cuts expire at the end of 2012, and when the House GOP attempts to permanently extend the cuts later this year, they won’t offer a plan to pay for them, The Hill reports:

House Republicans say they have no plans to pay for the extension of the Bush-era tax rates, a move that could erase the deficit reduction they have achieved since winning their majority in the chamber in 2010.

The lawmakers also said that Republicans had always intended for the rates on income and capital gains, enacted during former President George W. Bush’s first term, to be permanent.

“From my perspective, you’re setting tax policy on a permanent basis, long-term basis,” said Rep. Tom Reed (N.Y.), a freshman Republican and member of the tax-writing Ways and Means Committee. “It’s not a pay-for situation. It’s just strong policy that needs to be adopted.”

As The Hill notes, “It is Republican Party orthodoxy that tax cuts do not need to be offset because of the additional tax receipts they spur through economic growth.” As history has shown us, the Republican Party orthodoxy is wrong. The Bush tax cuts — at a 10-year cost of $2.5 trillion — did not inspire economic growth and instead blew a massive hole in the federal deficit, adding trillions of dollars to the debt. Without the Bush tax cuts, the dire debt situation Republicans insist is their top concern would actually be sustainable:

Aside from the debt, the economic costs of the Bush Tax Cuts were astronomical. With the money spent, the U.S. could have provided better health care, more student aid, and hired more teachers and public safety officials — thousands of which lost their jobs when federal and state budgets were crunched during the Great Recession. Even top Republicans have admitted that the GOP’s justification for the cuts — that they would create millions of jobs — was wrong.

Far from learning from their mistakes, though, Republicans are doubling down. The House GOP budget, passed last month, contains tax cuts that are even more heavily slanted toward the wealthy and would blow an even bigger hole in the federal budget.

Today, the Obama administration released its proposed federal budget for 2013. The Republicans’ reaction has been swift and united in its thematics, claiming the budget fails to promote fiscal responsibility or future prosperity, accusing Obama of “duck[ing] the responsibility to tackle this country’s fiscal problems” and choosing to “campaign instead of govern,” and generally slamming the budget as a “threat to job growth” and “more of the same failed ‘stimulus’-style policies.” All of this suggests the Republicans are unaware that America is not, in fact, the only market-based western democracy attempting to work its way out of a massive economic slump — or that these efforts provide concrete lessons in what will and will not produce economic growth.

In Britain, a large package of budget cuts and austerity measures which rolled out in 2010 has not unleashed the proverbial job creators in the private market. Instead, the country is still shackled with an economic growth trend that’s even worse that what it suffered in the aftermath of the Great Depression.

In the Eurozone as a whole, the European Central Bank and other relevant authorities have so far insisted on massive austerity measures from struggling countries in exchange for fiscal aid. Here, too, the result has not been a revitalized economy but a continuance of dismal growth rates.

Here at home, the effect of 2009′s recovery package and the tax deal in December 2010 was more than offset by cuts in state budgets. By the end of 2009, the combined budgets of the federal and state governments had entered a period of fiscal contraction from which they have yet to emerge.

The portions of Obama’s economic policy which actually passed simply made the economic hole created by state-level cuts less deep. Which was a valuable and necessary function, but insufficient to actually boost the economy back to healthy growth. Contrary to Republicans’ claim that Obama’s first two years were a period of unbound Keynesian experimentation, austerity is the budgetary policy reality which has accompanied America’s stagnant economic growth.

This matters because, now that the wars in Afghanistan and Iraq are winding down, the Bush tax cuts and the lingering effects of the recession remain the two primary drivers of the U.S. federal deficit. While the Republicans insist on not only maintaining all the tax cuts, but blowing an even larger hole in our revenue with added tax relief for the wealthy, Obama has proposed raising new revenue by allowing the Bush cuts for the top income rates to expire and by eliminating other injustices in the code which go to the benefit of the wealthiest Americans.

Even more importantly, because our tax system pulls in a percentage of the country’s overall wealth production, tax revenues will continue to underperform as long as our GDP production remains below capacity. The perverse irony of austerity as an immediate response to economic recession is that it drives down demand and GDP, thus driving down revenues and deepening the deficit hole it seeks to mend. In the opposite direction, a sudden positive jump in GDP could bring our economy back into line with its pre-recession trend and bring tax revenues back up without any change in tax rates or policy at all. The policy history in Britain, Europe, and here in America since the end of 2008 shows the Republicans’ austerity fixation won’t deliver this reinvigoration. But a recommitment by the government to boost demand could do the trick.

Obama’s budget, while imperfect, aims for the proper balance and the proper order of repairs: Investment now in jobs, infrastructure, state aid, extensions for the payroll tax cut and unemployment insurance, and other immediate boosts to demand, followed by longer-term deficit cutting once the economy is again firing on all cylinders. If the GOP had not been using every political tool at their disposal to undermine this approach during the last four years, the president could probably have done considerably more.

President Obama renewed his call for raising taxes on the wealthiest Americans to help reduce the deficit during his State of the Union speech, a proposal that became known in 2011 as the “Buffett Rule” after Obama mentioned that Warren Buffett paid a lower tax rate than his secretary last year.

Obama’s State of the Union speech offered the first concrete details about the oft-mentioned idea, as he called for a 30 percent minimum tax rate for millionaires. And according to the Washington Post’s Greg Sargent, Sen. Sheldon Whitehouse (D-RI) will introduce a bill this week that could make the Buffett Rule law:

Today, Senator Sheldon Whitehouse will unveil a new proposal — first reported on this blog — to bring the tax rate of millionaires paying less than middle class taxpayers up to 30 percent. While we don’t know if the Dem leadership will act on this particular proposal, the “Buffett Rule” will get some sort of Senate vote. Republicans are all but certain to oppose it, perhaps unanimously.

Whitehouse told reporters today that he plans to introduce the bill Wednesday, after it is scored by the Joint Committee on Taxation. As Sargent noted, Senate Republicans are likely to rule out the proposal unanimously. Republicans have, indeed, gone a long way to protect the low tax rates of the wealthiest Americans. They insisted on a one-year extension of the budget-busting high-end Bush tax cuts in December 2010 and their intransigence on taxes repeatedly took the government to the brink of shutdown and default in 2011, even costing the U.S. its first credit downgrade.

Up until now, Congress has tried to reduce the deficit through spending cuts alone, many of them to programs that disproportionately affect the poor and middle class. The one tax hike the GOP has supported, meanwhile, would primarily affect working class Americans. Whitehouse’s legislation, however, gives Congress a chance to ask the rich, who have benefited from falling tax rates even as their incomes have skyrocketed, to share in the sacrifice.

President Obama yesterday gave a major economic speech in which he took apart the conservative theory of trickle-down economics, the belief that cutting taxes and regulations spurs prosperity at the top of the income scale that then drips down to everyone else. “That theory fits well on a bumper sticker. Here’s the problem: It doesn’t work. It has never worked,” Obama said.

During the speech, Obama reserved specific criticism for the Bush tax cuts, saying that “in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history. And what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country.” This drew the ire of Washington Post fact-checker Glenn Kessler, who said Obama’s speech contained “significant factual error and/or obvious contradictions” (three “Pinocchios“) because of the statement:

The Bush tax cuts have been roundly criticized for being inefficient and poorly designed, but it is a stretch for Obama to blame slow job growth on the tax cuts. That are many factors that affect job growth, and it is silly to directly link the 10-year-old tax cut to today’s job growth — just as it is silly to claim that Bill Clinton’s tax increases resulted in a gain of 23 million jobs. Obama’s claim of the “slowest job growth,” in fact, includes the loss of jobs under his administration… Finally, Obama blames the Bush tax cuts for “massive deficits.” It is certainly true that the Bush tax cuts helped blow a hole in the budget. But they did not do it all by themselves.

Let’s unpack these one by one. First, Kessler claims that its unfair to say that the Bush tax cuts were for the wealthy. But last year, fully half of the entire benefit from all of the Bush tax cuts flowed to the richest 5 percent of Americans.

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As Democrats continue to push a renewal of the payroll tax cut included in last year’s deal to extend the Bush tax cuts, members of the Republican Party have reportedly grown concerned that if they do not go along with the proposal, they will lose their reputation as anti-tax zealots and get painted as defenders of the richest Americans. Arizona Sen. Jon Kyl (R), apparently, is not one of those Republicans.

Speaking on the Senate floor this afternoon, Kyl blasted the plan put forth today by Majority Leader Harry Reid (D-NV), which would partially pay for the extension by instituting a temporary surtax on Americans whose incomes top $1 million. Despite outlining his perceived problems with the plan, however, Kyl said he could be persuaded to vote for an extension — but only if Democrats agreed to again extend the 2003 Bush tax cuts for the wealthiest Americans:

KYL: It was part of an overall agreement in which we said we will extend all of the existing tax rates — the so-called Bush tax cuts, that is the rates that have been in effect since 2001 and 2003, we would extend this temporary tax holiday from the payroll tax cut, we would extend all of those. And I supported that. That frankly was the right thing to do, to extend all of these existing rates. … Now if we can do that again, I’m all for it. I’ll support the extension of the payroll tax holiday.

Watch it:

The payroll tax cut extension as proposed by Democrats would ensure that, at a time when the middle- and working-classes are still inching toward recovery, the average household would pocket an extra $1,000 a year. Meanwhile, in Kyl’s home state of Arizona, the millionaires’ surtax used to pay for much of the extension would affect just 0.1 percent of all taxpayers — a whopping 3,173 people who bring home an average annual income of $3.5 million, according to a Citizens for Tax Justice analysis. And while proposals exist to pay for the extension, no such plan exists for the Bush tax cuts, despite a 10-year price tag topping $2.5 trillion and no meaningful job creation to show for the cost.

Kyl’s statement is a direct contradiction to comments he made just a year ago during debate about the Bush tax cuts. “My view, and I think most of the people in my party don’t believe that you should ever have to offset a tax cut,” Kyl told reporters in July 2010. Now that it is a Democratic tax cut on the table, however, Kyl not only opposes the Democrats’ attempts to offset the costs, he wants to ensure that the middle class doesn’t get a tax cut unless the wealthiest Americans — whose tax rates are already at historic lows — get one too.

Republicans this week filibustered a Democratic plan to extend a soon-to-expire payroll tax cut, objecting to the fact that the extension was paid for by implementing a small surtax on income in excess of $1 million. To justify their objection to taxing the wealthy, Republicans have revived their false claim that taxing the rich amounts to taxing small business owners and job creators.

Bloomberg’s Al Hunt asked Rep. Fred Upton (R-MI) — who represented the GOP on the fiscal supercommittee that failed to craft a deficit reduction package — to explain this viewpoint, considering that more jobs were created under the Clinton administration and its higher taxes on the rich than were created following the Bush tax cuts. Upton admitted that “I don’t know specifically the answer to that question,” nonsensically pointing to Friday’s jobs report instead of trying to argue the premise of Hunt’s question:

HUNT: Why under those pre-Bush tax cut tax rates did the economy do so well in the ‘90s? And why under the Bush tax rates, less for the wealthy, to do so poorly in this decade?

UPTON: Well, a couple things. One, spending went up, Al, the wars. I mean, that’s trillions of dollars. And also there was no change in the entitlements. And we also know -

HUNT: But that shouldn’t hurt the economy. That shouldn’t hurt economic growth.

UPTON: Yeah, but that impacts the debt and the deficit.

HUNT: But I’m asking, why did the economy grow a lot? Why were more jobs created in the previous decade under higher taxes than in this decade under lower taxes?

UPTON: I don’t know specifically the answer to that question. I can – I can maybe merit a guess. But, I mean, in large part is because our job – we lost jobs. I mean, look at the jobs report that came out this last week, three-hundred- some-thousand people actually stopped looking for jobs.

Watch it:

As Center for American Progress Director of Tax and Budget Policy Michael Linden found, “in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.” In fact, “if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher.” The GOP, as Upton displays, simply has no explanation for these facts.

In a Bloomberg op-ed, wealthy investor Nick Hanauer also blew a hole in the GOP’s line of thinking, writing, “I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate. That’s why I can say with confidence that rich people don’t create jobs.” The GOP would do well to take note.

As Occupy Wall Street protestors continue to demonstrate across the country, congress’ fiscal super committee failed to craft a deficit reduction package due to Republican refusal to consider tax increases on the super wealthy. In fact, the only package that the GOP officially submitted to the committee included lowering the top tax rate from 35 percent to 28 percent, even as new research shows that the optimal top tax rate is closer to 70 percent.

Sen. Patty Murray (D-WA), who co-chaired the super committee, explained that the major sticking point during negotiations with the GOP was what to do with the Bush tax cuts. With that in mind, the National Priorities Project points out that those tax cuts this year will give the richest 1 percent of Americans a bigger tax cut than the other 99 percent will receive in average income:

The average Bush tax cut in 2011 for a taxpayer in the richest one percent is greater than the average income of the other 99 percent ($66,384 compared to $58,506).

“The super committee failed to grapple with the extraordinarily costly Bush tax cuts for the richest—tax policies that, according to the Congressional Budget Office, cost more in added federal debt than they add in additional economic activity,” explained Jo Comerford, NPP’s Executive Director. Frank Knapp, vice chairman of the American Sustainable Business Council, added in a statement yesterday, “the high-end Bush tax cuts are a big part of the problem – not the solution…It’s obscene to keep slashing infrastructure and services for everybody on Main Street to keep up tax giveaways for millionaires and multinational corporations.”

The Bush tax cuts have done nothing but blow up the federal debt and hand billions in tax breaks to the Americans who needed them least. As a reminder, past grand bargains when it came to the budget included substantial new revenues, to balance the pain of getting the country’s budget in order. Instead of adopting that approach, the GOP wants to continue lavishing tax breaks onto the 1 percent, while asking everyone else to sacrifice.