Sunday, December 5, 2010

Keeping Bush Tax Cuts Doesn't Raise Deficit

President Obama today complained that the middle class tax cuts should have passed the Senate after the House voted to pass a bill to extend the Bush tax cuts to only those making under $250,000 a year by incorrectly citing a non-existent increase to the budget deficit as his argument. Then the President said he would veto any tax bill unless an extension of unemployment benefits was passed as Democrats downplayed real effects that would have on the deficit.

"'Those provisions should have passed,' Obama told reporters," according to Reuters. "I continue to believe that it makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest 2 percent of Americans -- especially when those high-income tax cuts would cost an additional $700 billion that we don't have and would add to our deficit."

"In conversations with Majority Leader Harry Reid and Speaker Nancy Pelosi today, President Obama threatened to veto a compromise deal on the Bush Tax cuts if an unemployment extension was not included," according to Fox News.

Congress is trying to find ways to fund an unemployment benefits extension. Republicans are on record as favoring the extension in benefits as long as that extension doesn't raise the deficit.

According to the Huffington Post:
Republicans and conservative Democrats have opposed reauthorizing the benefits without offsetting their deficit impact by cutting spending from elsewhere in the budget. But those same lawmakers have not insisted that tax cuts for the rich, estimated to cost nearly $700 billion over 10 years, be offset in any way. A yearlong reauthorization of unemployment benefits would cost roughly $60 billion.
What the search engines, the Huffington Post, Democrats and the President don't tell you is that there is no real increase to the deficit if we extend the Bush tax cuts. The deficit doesn't go up if the Bush tax cuts are left in place. Assuming with liberals that the hit to the economy and small businesses doesn't affect the numbers, raising taxes on those making over $250,000 would cause the deficit to go down by $700 billion over ten years. If they extend the tax cuts, nothing happens to the deficit.

It's already the private sector's money and they are just trying to dig their hands into it. It's funny how the Democrats only become deficit hawks when they want to put their hands into your pockets. But notice how they relax about deficit spending when an entitlement is needed.

Extending unemployment benefits would cause a real increase in the deficit of $60 billion over one year unless they are paid for, as Republicans want, out of the stimulus. It's deficit neutral to keep the tax cuts and pay for unemployment out of the stimulus. That would be the way to get it done. Then everyone could go home.

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