The NRCC Quits On The Truth

October 28, 2010 11:08 am ET

The NRCC has frequently placed undue blame on a variety of Democratic candidates for their support of a number of policies that affect the economy. However, in their latest attack on Rep. Mark Critz (D-PA), the NRCC ludicrously attempts to equate Critz's vote to adjourn the House in September to job losses in Pennsylvania on the very same day. The NRCC does so by characterizing Critz's vote to adjourn as his refusal to "help small businesses and families" by failing to extend Bush-era tax cuts — when in reality, congressional Democrats have vowed to act on extending the tax cuts to 97% of Americans after the midterm election.

NRCC: "Mark Critz Quit On Pennsylvania"

We don't quit. In tough times we help each other. We thought Mark Critz would help us. We were wrong. When Congress had that chance to stop the pending tax increase, to help small businesses and families, Critz voted with Nancy Pelosi to leave town and campaign. That same day here in Johnstown, DRS Technologies laid off 50 workers. Mark Critz quit on us. It's our turn to quit on him.

GOP "Had That Chance" To Prevent Tax Increases, But Included An Expiration Date On Tax Cuts To Hide Their True Cost

Time: Congress Wrote Tax Law To Expire After 2010 Because It Made Cuts Appear Cheaper. According to Time:

Topping the list of odd features is the "sunset" provision that repeals the entire bill at the end of 2010. Budget rules require Congress to include a sunset clause in all major tax legislation, but this sunset arrives a year early--after 10 years instead of the 11 years covered by the current budget resolution. That year was shaved off to keep the total cost of the bill under $1.35 trillion. By repealing the legislation in the 10th year, Congress saved billions of dollars. Without the repeal and a few other tricks, the cost of the full 11-year plan would balloon to more than $1.8 trillion by the end of 2011, far exceeding anything the Democrats would vote for. And the cost in the second decade would reach as much as $4 trillion. Even some conservatives on Capitol Hill are dismayed by the apparent dishonesty of the early sunset. After both parties agreed to a smaller tax cut, the conference committee pulled a fast one.

[Time6/3/01, emphasis added]

American Enterprise Institute: Reconciliation "Ploy" To Pass Bush Tax Cuts Means They Expire After 10 Years. According to Norman Ornstein, resident scholar at AEI:

It is worth repeating why we are in this particular car heading toward the cliff. When the Bush tax cuts were on the agenda at the very beginning of his presidency, Republicans in Congress and the White House made a tactical choice to avoid giving Senate Democrats the leverage that a 60-vote hurdle can provide by employing reconciliation (yes, the same tool that those who applied it then condemned roundly when it was used for health care reform this year). It was tricky to use reconciliation for tax cuts, which increased deficits when reconciliation was specifically supposed to be used for revenue-neutral or deficit-reducing programs. But the decision was made to use it for this purpose--but not to violate the proviso that the plan would increase deficits outside the budget window of 10 years.

That meant a ploy of declaring that all the tax cuts would expire entirely after 10 years, including the absurd-on-its-face provision that estate taxes would gradually decline to zero in 2010--and then be fully restored in 2011. From the day after the tax cuts were signed into law, Republicans were campaigning to extend them, in effect admitting that the policy was built around a "never mind" ruse. To be fair, there were plenty of ruses in the health care reform reconciliation, so it is not as if one party is clean--this is legislative politics. But the charges now emanating from Republicans that the Democrats are going to be responsible for a huge tax hike is, shall we say, bemusing.

[AEI.org, 7/21/10, emphasis added]

Democrats "Determined To Act" On Tax Cuts When Congress Resumes

Congress Resumes Session On November 15. According to records of House proceedings, at 1:04 AM on September 29, 2010, "[t]he House adjourned pursuant to H. Con. Res. 321. The next meeting is scheduled for 2:00 p.m. on November 15, 2010." [Clerk.House.gov, accessed 10/7/10]

Axelrod: Democrats Determined To Act On Tax Cuts Before January Expiration. From the Washington Post:

The White House and congressional Democrats conceded Sunday that they will probably wait until after the Nov. 2 elections to vote on a plan to prevent tax rates from rising next year for the vast majority of Americans.

"I doubt that we will" stage a vote before adjourning next week, House Majority Leader Steny H. Hoyer (D-Md.) said. Speaking on the Sunday talk shows, he and White House senior adviser David Axelrod added that Democrats are nonetheless determined to act before the tax cuts expire in January. [Washington Post9/26/10]

Washington Post: "Both Parties Expect The Tax Cuts Will Be Extended." From the Washington Post:

Republicans would not compromise on any of the issues over the past two weeks and attacked Democrats for ending the session without voting on the tax cuts. House Republicans even tried to block the formal resolution that allows the chamber to adjourn, leading to an unusual 210-209 vote in which 39 Democrats joined nearly all the Republicans in opposition.

Tax rates will increase next year if Congress does not address the issue, although both parties expect the tax cuts to be extended when members return after the elections. [Washington Post9/30/10]

President Obama And Leading Democrats Favor Extending Tax Cuts For 97% Of Americans

PolitiFact: Dems Consistently Say Only Tax Cuts For Wealthiest Will Be Allowed To Expire. According to the non-partisan PolitiFact.com, in their analysis of an allegation from Rep. Mike Pence that Democrats want all tax brackets to rise:

Do Democrats want every tax bracket to rise, as Pence suggests? In a word, no.

For many months, Democratic officials have consistently said that they intend to let only the tax cuts for the wealthiest individuals lapse. The cutoff they usually suggest is $200,000 for individuals and $250,000 for married couples filing jointly. President Obama campaigned on just such a plan, and we've logged those promises into our Obameter campaign promises database.

[...]

Pence is right that every tax bracket will go up if the law is not extended. Still, we think the claim that Democrats don't want to extend the law is inaccurate. While the legislative drafting is still in process, the Democratic majority in Congress has made clear that it plans to extend tax cuts for all but the top couple percentage points of the income distribution. So it's highly misleading for him to say that Democrats actually want to see all the bill's cuts expire. Indeed, Pence's comment verges on a scare tactic.

[PolitiFact.com, 7/22/10, emphasis original]

Reuters: "Two To Three Percent Of Americans" Are Affected By Democrats' Proposals. According to Reuters: "Lawmakers are mulling the renewal of tax cuts enacted in 2001 and 2003 under former president George W. Bush that expire at the end of this year. President Barack Obama and his Democratic allies in Congress want to extend the lower rates for individuals earning less than $200,000 or couples making less than $250,000. About two to three percent of Americans fit into the upper income categories." [Reuters7/21/10]

President Obama's FY2011 Budget Calls For Extending Bush Tax Cuts For Families Making Less Than $250,000 Per Year. As Market Watch reported in February: "Facing a gaping deficit but aiming to spur job creation at the same time, President Barack Obama's fiscal year 2011 budget would hit top earners, oil companies and others while giving tax breaks to small businesses to help them hire new workers. ... Obama wants tax breaks proposed by President George W. Bush to expire this year. His budget would eliminate tax breaks on those making more than $250,000 a year, a move almost certain to be opposed by Republicans and perhaps some Democrats as the economy crawls out of the recession. 'We extend middle-class tax cuts in this budget,' Obama said Monday at the White House, but 'we will not continue costly tax cuts for oil companies, investment fund managers, and those making over $250,000 a year. We just can't afford it.'" [Market Watch2/1/10]

Speaker Pelosi: High-End Tax Cuts Should End. According to The Hill: "House Speaker Nancy Pelosi (D-Calif.) on Thursday rejected extending tax cuts for the wealthiest tax bracket that are set to expire at the end of the year. Pelosi took off the table a short-term extension of those cuts floated by some lawmakers in her own party. 'No,' the speaker said at her weekly press conference when asked if the cuts for the highest bracket should be extended. 'Our position has been that we support middle-class tax cuts. ... I believe the high-end tax cuts did not create any jobs, increased the deficit and should be repealed,' she said." [The Hill7/22/10, emphasis added]

Treasury Secretary Geithner: We Will Extend Middle- And Lower-Income Provisions Of Bush Tax Cuts. According to the Wall Street Journal: "The Obama administration will allow tax cuts for the wealthiest Americans to expire on schedule, Treasury Secretary Timothy Geithner said Thursday, setting up a clash with Republicans and a small but vocal group of Democrats who want to delay the looming tax increases. Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year. 'We believe it is appropriate to let those tax cuts that go to the most fortunate expire,' Mr. Geithner said at a breakfast with reporters." [Wall Street Journal7/23/10, emphasis added]

New York Times: Obama Plan Leaves Much Of The Bush Tax Cuts In Place. The New York Times prepared an infographic showing where President Obama seeks to change Bush-era tax law, and where he intends to leave it unchanged:

bushtaxcuts

[New York Times7/25/10]

Cutting Taxes For The Wealthy Does Little To Stimulate The Economy...

Bloomberg News: "Give The Wealthiest Americans A Tax Cut And History Suggests They Will Save The Money Rather Than Spend It." According to Bloomberg News: "Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it. Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody's Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell. The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more." [Bloomberg News9/14/10]

New York Times: "Research Suggests That Tax Cuts... Have Limited Ability To Bolster The Flagging Economy." According to the New York Times: "The concept of lower taxes is so appealing to voters that many embrace them as an economic cure-all. But economic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand. The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest 'bang for the buck,' because wealthy Americans were more likely to save their money than spend it." [New York Times9/11/10]

CBO: Among Eleven Proposals To Spur Economic Growth, Cutting Income Taxes Ranks Last. Below is a chart created by the Congressional Budget Office to show the "cumulative effects of policy options on employment in 2010 and 2011":

[Congressional Budget Office, 2/23/10]

...And The Layoffs At DRS Technologies Had Nothing To Do With Taxes

DRS Technologies' Layoffs Were The Result Of Concluded Contracts, Not The Threat Of Higher Taxes. According to the Tribune-Democrat: "Another 50 people have lost their jobs at DRS Laurel Technologies at 246 Airport Road, Richland Township. 'This reduction in work force is a combination of contracts being concluded and some creating of efficiencies within the company,' Richard M. Goldberg, senior vice president of DRS Technologies said from corporate offices in Parsippany, N.J. ... The company remains hopeful it can win new contracts, Goldberg said, noting that the local plant would benefit greatly if Boeing's KC-767 NewGen Tanker midair refueling aircraft is selected by the Air Force. DRS Laurel is making the tanker's computerized control station." [Tribune-Democrat, 9/30/10]

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