Thursday, November 17, 2011

Some Democrats support the full expiration of the Bush tax cuts

More and better Democrats.--SS

Some Democrats support the full expiration of the Bush tax cuts:

In Wonkbook this morning, I talked at length about the fact that the Democratic Party supports extending almost all of the Bush tax cuts. If you want to find national figures who support ending them, you have to look to Alan Greenspan and Mayor Michael Bloomberg — both of whom, incidentally, identify as Republicans.

But that’s not the same as saying all Democrats support extending the Bush tax cuts. A fair number of House Democratic staffers e-mailed to protest that their boss does, in fact, support letting the tax cuts expire. And some of them go even further than that. Rep. Bobby Scott, for instance, has a thoughtful proposal for offsetting the contractionary effects of letting the Bush tax cuts expire amid a weak economy:

While we have to be sensitive to the fact that we are still in an economic recovery, the additional revenue from a return to the Clinton-era tax rates could be directed immediately towards job creation through investments in direct job programs, such as highway and public transit construction jobs, summer jobs programs, and the AmeriCorps program. Such targeted, temporary job creation spending will not only accelerate the recovery, but the influxes in spending in these areas can be ended a lot easier than reductions in individual income tax rates.

As the Congressional Budget Office will tell you, if you’re looking to create jobs, a dollar of direct spending on things like infrastructure investment and unemployment insurance will get you a lot further than the Bush tax cuts will (here’s the chart). So Scott’s proposal is not only more fiscally responsible than just about anything in the debate right now, but it’s also better for the short-term recovery.

Similarly, the House Progressive Caucus, in its proposed budget, allows most of the Bush tax cuts to expire. So though it’s still the case that President Obama and most congressional Democrats want to see the bulk of the Bush tax cuts extended, it’s worth being clear that that’s by no means the consensus position within the party.

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