Today the Senate voted on two cloture motions related to tax cuts for the wealthy. In each case, 60 votes were required to move a tax cut bill forward. The first motion would have moved forward a bill to extend the Bush tax cuts, but only for families making less than $250,000 a year and individuals making less than $200,000 a year. The second vote, 27 minutes later, was on a motion to move forward a bill that would have extended the Bush tax cuts for families making less than $1 million a year. In view of the vow of every single Republican to allow no legislation to move forward until the wealthiest taxpayers were given tax cuts, neither cloture motion had a chance of passing.
This is expected to cost $800 billion in added debt over the next ten years. That’s an $800 billion gift to the wealthiest people in America, at your expense. Of course this vote was just for show. President Obama has already agreed to a temporary extension of tax cuts for the wealthy, and called a meeting on Tuesday to work out a compromise. Negotiating on behalf of Obama are Secretary of the Treasury Timothy Geithner and Jacob Lew, Director of the Office of Management and Budget.
Timothy Geithner is a former president of the Federal Reserve Bank of New York, described by the Washington Post as “a primary architect of the Bush administration’s response to the financial crisis.”
Other than Paulson, no one had more say than Geithner in bailing out Bear Stearns in March or in the events leading up to the bankruptcy filing of the investment bank Lehman Brothers. He also was the primary architect of the $85 billion loan to rescue AIG, and then increased that amount to a total of $152 billion as the company’s woes continued. All of those actions have been criticized and debated by lawmakers and economists, who say the moves have contributed to the financial system’s turmoil.1
In other words, tax cuts for the wealthy have been placed safely in the hands of a guy who loves giving your money to the richest people in America.
Meanwhile, Representative Jim Moran of Virginia has a completely different take on tax cuts, one we might do well to consider. Moran is against giving tax cuts to anybody right now. In a statement released on Thursday, he says:
Today, the House voted to permanently extend the Bush tax cuts on incomes under $250,000. At a cost of three trillion dollars, I could not in good conscience vote for the permanent extension of a tax structure so fiscally unsustainable.
I opposed the Bush tax plan when it originally came before Congress in 2001 because I feared that it would help turn the budget surplus he inherited from President Clinton into large budget deficits. It did. The 2001 and 2003 tax cuts were designed with a sunset provision because even anti-tax zealots realized that if made permanent, they would have a ruinous long-term effect on the federal budget.
We should allow the Bush tax cuts to expire as designed, both those for people making under $250,000 and those earning up to one million and beyond. Failing to do so would add $3.7 trillion to our current $13 trillion in national debt. With their expiration, we would return our nation to the tax structure that existed during the budget surpluses and economic growth of the Clinton years.
When the Bush plan was first proposed in 2001, the great cost of those tax cuts was sold to the public as a means of generating economic growth. That has proven to be false. The decade that followed the 2001 tax cuts featured the slowest average annual growth since World War II. Nor did lower taxes increase employment. Work-force participation fell in 2001 and has never returned to the record level set in 2000 – before the tax cuts took effect.
As these irresponsible tax cuts are set to expire, we are again being asked to surrender our fiscal future for the promise of illusory short-term economic growth. It was not the right course in 2001; it’s not the right course today.
The seriousness of the budgetary situation requires that we make difficult choices in order to secure our nation’s fiscal future. The expiration of the Bush tax program is one of those choices.2
Considering most politicians’ complete lack of ethics and responsibility, Moran’s statement is remarkable. He actually places the future of the United States ahead of sucking up to the wealthy — and even ahead of appeasing the middle class. If enough Representatives were willing to take such a stand, there might be some hope for this country.
1 David Cho, Lori Montgomery and Shailagh Murray, “Obama Picks New York Fed Chief to Lead Treasury” (Washington Post, 22 November 2008).
2 Press release, 2 December 2010.