Wednesday, July 21, 2010

Conspiring to extend Bush's tax cuts - Forsaking recovery for "certainty"

There are two kinds of people in this country today: those who can earn money overseas and everybody else. While some of us are able to capitalize on the opportunities presented in other markets, hundreds of millions of our fellow Americans make all their money here, where they live. Those of us whose income is based exclusively in these United States now count ourselves as lucky if we have a job, a house, and a health insurance policy. If we have the same position, same address, and same coverage we had two years ago, we're practically lottery winners. That's because the Great Recession of 2008 has taught any American who actually works for a living to narrow his or her focus from prosperity to just plain survival.

Not so much for corporate America, which, partly due to its ability to make money in other places, is doing better than ever. After trillions of taxpayer dollars in bailouts and loan guarantees, Wall Street is back earning billions in quarterly profits and pushing the Dow above 10,000. Non-financial companies are also doing very well now that the extreme cost-cutting measures of the past year-and-a-half are paying off (remember hundreds of thousands of people being laid off every month?). Those firms are sitting on about $2 trillion in cash, which is some $500 billion more than they had when the Great Recession began. Not bad, right?

So why aren't banks lending and why aren't businesses hiring? Why are the "wealth creators" withholding investment capital and why are the "job creators" so slow to put people back to work? The answer lies in a thick gumbo of polls, statistics, think tank rhetoric, and hard-core lobbying all cooked up to do one thing: protect the expiring Bush tax cuts.

In this drama, where marginal tax rates for the top 2 percent of income earners are more important than the lives and livelihoods of millions of American workers, the players include many of the usual suspects. The American Enterprise Institute supplies the intellectually dishonest policy papers, The Wall Street Journal runs articles citing those papers, right-wing radio and FOX News regurgitate the talking points from those articles all day and all night, and the U.S. Chamber of Commerce, the National Federation of Independent Business (NFIB), and the Business Roundtable provide the cash to lobby members of Congress to keep those tax cuts from expiring on schedule.

So far, it has worked like a charm. House Republicans are bought and paid for — something they proved early last year when not one of them would vote for the Recovery Act, designed to stop the Great Recession in its tracks. In the Senate, the Republican caucus has shown through their unprecedented use of the filibuster threat on every major piece of legislation that it is basically leased with an option to buy. Because threatening a filibuster is considered to be actually doing it, Senate Republicans have put a 60-vote threshold on the Democratic agenda for no other reason than to make it more difficult for the Democrats to govern. The combination of House obstreperousness and Senate intransigence has conspired to prevent economic recovery from happening more quickly and undermined consumer confidence, providing the opening for what has to be the Frank Lutz-generated talking point of the fall campaign: uncertainty.

The Chamber, the Roundtable, and the NFIB are certain that they want "entitlement programs" reformed, their "regulatory burden" eased, and the Bush tax cuts extended "at least temporarily." They're claiming the lack of certainty about whether or not these things will get done is the reason the businesses they represent won't do their part for our country's recovery and put the American worker back on the job.

In practical terms, that means these business interests want Medicare, Medicaid, and Social Security (now large enough to basically eat up all federal receipts) reformed immediately. And they want President Obama and the Democrats in Congress — who ran and won in 2008 on a platform that included stricter regulations — to go back on the promises they made to voters. And they really want the federal government to run up a 10-year deficit of between $675 billion and $3 trillion so the Bush tax cuts can become permanent and their tax rate can be 35 percent, not 39 percent. Then, and only then, will these people consider sharing the $2 trillion they're hoarding.

But they can be certain entitlement reform isn't happening between now and January because it's never happened before. They can be certain that the BP spill in the Gulf means the era of sacrificing health and safety regulations for increased profits is over forever. And they've been certain President Bush's tax cuts were going to expire in January of 2011 since he signed them into law in May of 2003 — or at least since Election Day 2008. The only thing they're not certain about is whether or not the voters will be gullible enough to blame Democrats for the stalling tactics that slowed the recovery and stupid enough to let the same Republicans who killed our economy try to revive it with the same ideas (like tax cuts for the outrageously wealthy) that didn't work the first time.

I'm certain we have more sense than that.


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