By Jay Heflin - 07/13/10 03:27 PM EDT
The majority leader also said that extending the Bush tax cuts for the wealthy would not be a part of the discussion since their extension would not help stimulate the economy.
“Frankly, the upper-income, $200,000-$250,000 and above individual is less likely to make any change in his or her spending habits as a result [of extending tax cuts for them],” Hoyer said, adding, “Making sure there are more dollars in the pockets of middle-income earners pretty much guarantees they’re going to spend it on consumer goods that they need.”
If lawmakers extend for two years the Bush tax cuts for the middle class and alternative minimum tax relief, as well as maintain the estate tax at 2009 levels, it is expected to cost more than $400 billion, according to some lawmakers. Under pay-as-you-go rules this cost does not have to be offset.
Hoyer said this cost should be offset down the road but not in the short-run as the economy struggles to recover from a historically rough recession.
“We still find ourselves in a real economic slowdown,” he said. “You can’t stimulate [provide tax cuts] and depress [pay for them] at the same time because if you do the net affect is zero.”