On Tax Relief and Deficit Reduction

Democrats don’t understand how Republicans can favor tax cuts while they claim to worry about the deficit.

Republicans have the left positively confused as they say to favor tax cuts on the one hand, regardless of their impact on the deficit, yet block the extension of unemployment benefits on the other, citing budget concerns.

Senator Jon Kyl of Arizona insisted on Sunday that Congress should extend President George W. Bush’s tax cuts for high-income Americans even as they would add to the deficit. “Surely Congress has the authority, and it would be right to, if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs,” said the senator during an appearance on Fox News Sunday. “You do need to offset the cost of increased spending,” he added, “and that’s what Republicans object to.”

Clear and simple? Not according to The Huffington Post, which calls it “deficit fraud” — and not according to the White House either. Press Secretary Robert Gibbs accused Kyl on Twitter of pretending that the wealthy “need” tax cuts “while middle-class families are on their own to fend for themselves as a result of [the] Bush economy.”

Press Secretary Hari Sevugan for the Democratic National Committee deviated even further from the truth by claiming that “tax cuts for the rich at the expense of working people is the same backward policy Republicans used to put the nation in this hole, and it’s the same policy they promise to return to if put in a position of power again.”

Steve Benen neatly summed up the left’s position at the Washington Monthly, calling it “quite a message to Americans.”

Republicans believe $30 billion for unemployment benefits don’t even deserve a vote because the money would be added to the deficit, but Republicans also believe that adding the cost of $678 billion in tax cuts for the wealthy to the deficit is just fine.

Were the Bush tax cuts reversed, it should surely make the current administration’s job at balancing the budget much easier. But trying to beat the Republicans at their own game by pretending that they are proposing a fiscally irresponsible policy is disingenuous.

In all fairness to the Democrats, President Bush’s economic policy wasn’t terribly different from what they’re doing. It was under President Bush, after all, that, in the name of “compassionate conservatism” and with hopes of creating an “ownership society,” the foundations for today’s recession were laid. It was under President Bush that the semi-government entities Fannie Mea and Freddie Mac were allowed to go wild and ruin the home mortgage market. And it was under President Bush that the first banks hit by the turmoil that ensued were bailed out with billions of dollars of taxpayers’ money.

President Bush plunged the country into the red but his successor added significantly to that with the nationalization of automakers, a momentous overhaul of the health insurance industry and a multibillion dollar stimulus package that has so far yielded little result except the questionable assurance that things would be far worse without it.

In reaction to President Barack Obama’s interventionist policies and under pressure from the popular Tea Party movement, Republicans are once again preaching fiscal conservatism. Democrats meanwhile still seem to think of economics as a zero-sum game in which lowering one person’s taxes must come at the expense of another person’s government handouts. They won’t see that the economic activity stirred by a lower tax pressure will eventually benefit the whole of society.

Rather a tax cut is something that “adds” to the budget, they believe, while the rich, in spite of already bearing the brunt of government’s costs, would force “working people” to “fend for themselves” — what atrocity! This administration seems to think that ordinary Americans simply can’t do without government yet if opinion polls are any indicator, more and more people are beginning to realize that in spite of all its good intentions, it’s government that is the problem.