Economy & Budget

A debt ceiling freeze is sheer idiocy

By law, a statutory limit restricts the total amount of debt the federal government can accumulate. This limit can only be increased by Congress. Treasury Secretary Timothy Geithner noted in a letter to Congress yesterday that this “debt ceiling” will be reached as early as March 31, 2011.

Many “Tea Party” candidates campaigned on the promise to vote against any increases to the debt ceiling. Following through on this pledge would be unbelievably reckless and could potentially crater the U.S. economy. 

 As I wrote last November: 

“The budgetary consequences of this conservative pledge would be catastrophic and far-reaching, forcing the immediate cessation of more than 40 percent of all federal government activities (excluding only interest payments on the national debt), including Social Security, military operations in Iraq and Afghanistan, homeland security, Medicare and unemployment insurance. This would not only threaten the safety and economic security of all Americans but also have dire impacts for the economy and job growth.  

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Administration confused regarding tax policy

This week the House of Representatives adopted rules which could make it more difficult to fund more government spending through increased taxes on individuals or businesses. When coupled with the extension of 2001 and 2003 taxpayer relief laws late last year, it would appear many policymakers in Washington have realized higher tax burdens remain ill-advised in the current economic climate.

Unfortunately, some strategically placed administration officials and lawmakers have failed to embrace this approach. They continue to push proposals that reject the common-sense philosophy behind the new House rules and the tax-rate extensions.

As part of the bargaining over extending the current individual tax laws, the president insisted on the resurrection of the death tax -- which fell to zero this year but was poised to roar back in 2011 at 55 percent. The White House compromised at a 35 percent rate, but the problem with this duplicative tax remains: citizens are taxed throughout their entire life on their property, income, and possessions. By taxing individuals' estates after death, the government charges their heirs once again on these same possessions.

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Republicans abandon pay-as-you-go budgeting (Rep. Lloyd Doggett)

On day one of this new Congress, the House Republicans first step is backwards. While professing great concern about spending and debt, they abandon pay-as-you-go budgeting, returning to the Bush-Cheney approach -- endless borrowing. They claimed so much wasteful spending could be eliminated, but reject the very rule that required them to cut spending as one way to offset the revenue loss from each new tax break they give away. Their misleading “Cut-Go” just cuts fiscal discipline and says, “Go borrow from the Chinese.”

They are like the fellow who bellies up to the bar, asking for just one more tax break for his buddies, while declaring, “put it on my tab.” But it’s really “our” tab. All Americans will be indebted for Republican addiction to endless borrowing for endless tax breaks.

We cannot eliminate deficits by revisiting Republican trickle-down economics -- this nonsense dug the deficit hole in the first place. Even Republican economists, like former CBO Director Doug Holtz-Eakin, concede that “there is no serious research evidence” to support the too frequent claim that “tax cuts pay for themselves.”

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A New Year's resolution for Congress: work together to create jobs (Rep. Carolyn Maloney)

As we head into the next year and the 112th Congress, understanding the data behind our economic recovery will be crucial if the economy is to grow and strengthen. A closer look at how states fared in 2010 as well as how they fared during the last four recessions can be a useful guide to both Republicans and Democrats who are serious about shaping strong, smart, and strategic job-creation policies in 2011.

Simply put, the Great Recession of 2007-09 was the worst post-World War II recession, and this fact is substantiated in a recent report by the U.S. Congress Joint Economic Committee.

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Tax-cut extension to 2012: Obama’s gimmick, GOP’s gamble

The tax-cut deal recently passed by Congress and signed into law by President Obama extended the Bush-era tax cut for only two years, or until 2012.  It is no coincidence that the new expiration date falls around the next presidential election.  The two-year extension was by design and crucial to President Obama’s willingness to compromise with the Republicans.  It’s his victory token to be cashed in two years.
 
For the GOP, the extension timeline may well turn out to represent a compromise it should have avoided at all cost. It is a trap that may cost the party dearly with their chances to reclaim the White House in two years.

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The folly of trading an updated budget for a ‘robo budget’ (Sen. Pat Leahy)

Last week, Republican members who had pledged to support the fiscal year 2011 Omnibus Appropriations Bill changed their minds and chose instead to walk in lockstep with the House and Senate Republican leaders who believe that freezing spending at the fiscal year 2010 level is good politics.

On the face of it that approach has an appeal to it – no new spending. What a nice sound bite. It makes everything seem so simple.

But while one senator of the minority party gleefully remarked on the Senate floor, “We won!,” it is worth taking a minute to consider what a Continuing Resolution means – not for the Republican Party, but for the American people.

That it is a short-sighted abdication of Congress’ responsibility over federal funding almost goes without saying. But in fact it is worse than that.

The senators who profess to care about the security of this country, but refuse to put their money where their mouths are, bear responsibility for the consequences.

Every American family – yours and mine – knows that in a year’s time our budget priorities and the necessities of our families change from the year before. So do the budget priorities of a diverse country of more than 300 million people in a rapidly changing and dangerous world.

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The unkindest cut of all

Nothing in the tax compromise worked out between the White House and Congressional Republicans is fraught with as much danger to the economic security of working Americans as the partial payroll tax holiday. Since its inception 75 years ago, Social Security has provided a dependable retirement income for millions of workers who contributed to the program during their working years. For many of these seniors it has meant the difference between a dignified old age and the ignominy of poverty. And for 75 years, the enemies of Social Security have tried without success to undermine the program.

Democrats have strongly resisted every one of these efforts to undermine the Social Security system – until now.

Notwithstanding the gratuitous hand wringing over Social Security’s ability to pay promised benefits by the Bowles-Simpson Fiscal Responsibility Commission, the 2010 report of Social Security’s trustees shows that the program can pay full benefits until 2037 and close to 80 percent of scheduled benefits after that. Polling data makes clear that a majority of Americans are willing to pay slightly higher taxes if that is what it takes for the system to pay full benefits into the foreseeable future. Social Security will be there to provide a financial floor for today’s workers when they get ready to retire. Only an act of Congress can render the system incapable of meeting its obligations.

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Distorting the tax policy debate (Rep. Ron Paul)

George Orwell warned us about the use of “meaningless words” in politics, words that are endlessly repeated by sloganeering politicians until they have no meaning at all. Meaningless words certainly were on display during last week’s congressional debate over the latest tax bill.

Over and over again we heard trite, empty phrases like “tax cuts for the wealthiest 2 percent,” “tax giveaways,” “tax earmarks,” and “borrowing money to give to millionaires.” Time and time again the same falsehoods were presented as fact, and reported as such by a credulous media.

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Tax bill is a bad deal for the middle class (Rep. Paul Tonko)

This bill is a bad deal for the middle class. If you work hard and play by the rules, you should be rewarded. However, this bill does the opposite – it lines the pockets of the mega-rich at the expense of everyone else.
 
Our top priority right now should be job creation. We tried the tax cuts proposed today for the last decade under the illusion that they would create jobs – and so I ask – where are they? This recession wasn’t an act of nature; it was man-made. Shame on us if we do the same thing again and expect different results.
 
I will continue the fight to strengthen the middle class though tax cuts; and I will continue the fight to extend unemployment benefits for the millions who are out of work through no fault of their own. I have voted in favor of both in recent weeks. We should not support a giveaway to millionaires and billionaires at the expense of future generations.
 

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Scaling back the estate tax hurts middle-class families (Rep. Keith Ellison)

The estate tax is an important part of our progressive tax code. I’m disappointed that Congressional Republicans fought for estate tax cuts when the real focus should be on how to support middle-class families still looking for work and struggling to make ends meet.

The estate tax reduction in the legislation now going to President Obama is an unnecessary give-away to the ultra-wealthy. It was one of the reasons I voted against the hold-the-middle-class-hostage tax package orchestrated by Congressional Republicans.

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