Grassley: Allowing Bush tax cuts to expire will have political consequences

“Outside of this town, the folks paying the 10 percent tax increase tell us it is not free,” he said, adding, “Keep in mind, taxpayers are literally the folks footing the bill and they will respond to an across-the-board tax increase.”

Grassley said business owners are preparing for a tax increase, which has caused them to postpone expanding their operations and has created a drag on the economy.

He also expressed some frustration with Democratic leaders requiring offsets for the extension of these tax breaks while some spending programs are extended unpaid-for. 

“This double standard doesn’t make sense,” he said. 

Wednesday’s hearing is focused on how to extend the Bush tax cuts in light of the growing deficit. 

In opening remarks, Senate Finance Chairman Max Baucus (D-Mont.) noted that President George W. Bush enacted these tax breaks when Congress enjoyed a surplus, but the current, historically large deficit makes the extension of these tax cuts difficult. 

“The big questions before us now are whether we should make some of these tax cuts permanent,” Baucus said. “And if so, which ones?”