“What . . . will give us a shot in the arm going forward is… just saying no.”
- House Republican Whip Eric Cantor [Washington Post, 2/9/09]
This week, House Republicans are FOR the President's tax cuts and investments in their hometown economies--one week after they were unanimously AGAINST them. Republican members are hearing from constituents who want the benefits of the American Recovery and Reinvestment Act signed into law by President Obama this week.
- But to be clear, the House GOP plan for America's economy shows they are FOR:
- 2.2 million FEWER jobs than President Obama's plan
- More of the same failed tax cuts for the wealthiest Americans that helped lead to a deep recession
- No investments to put America's economy on a stronger footing
Independent analysis showed the House Republican plan --which got a full public hearing on the floor of the House and did not receive enough votes to pass--created only 1.3 million jobs … compared to 3.5 million new or saved jobs under the law the President signed.
Tax Cuts for the Wealthy
The Republican proposal was made up almost entirely of tax cuts for the wealthy, with the centerpiece cutting the 10 and 15 percent tax rates to 5 and 10 percent. This proposal continues the policy of more for those at the top--while the President's plan is the single most extensive expansion of tax cuts for low- and middle-income households ever. According to the Center on Budget and Policy Priorities, under the House Republican plan:
- Only about the top 20 percent of households would get the full tax cut -- those with incomes high enough to place them in the 25 percent tax bracket or higher -- which for a married couple with two children means an income of over $90,000.
- Higher-income households would get a much bigger tax cut than less-affluent ones. A married couple with two children with income of $100,000 or more would get a tax cut of $3,395 -- 17 times the $200 tax cut that the couple would receive if its income were $30,000.
- More than 47 million low- and moderate-income filers would receive no tax benefit at all.
In contrast, tax cuts make up 36 percent of President Obama's American Recovery and Reinvestment Act. The centerpiece of that, the “Making Work Pay” tax credit, will provide a tax reduction of $400 per worker to all workers earning at least $6,500 and $800 for working families earning at least $13,000. Under this new law:
- 129 million working households will receive this tax cut--about 95% of all working households.
- It will phase out at high income levels ($95,000 per individual and $190,000 for couples filing jointly).
- CBO finds that tax cuts and other benefits for low- and middle-income households are more than three times as effective as tax cuts for high-income households in boosting our economy.
No Investment in Job-Creation or the Future
Further reducing the economic impact, the Republican alternative strips virtually all of the job-creating investments and investments to transform our economy in the future.
- NO funding for America's highways, bridges, transit, and rail
- NO investment in energy efficiency and renewable energy
- NO transition to computerize medical records to reduce costs and save lives
- NO expansion of broadband access to connect American small businesses to a global economy
- NO help to states to protect the jobs of police officers, teachers, and health care workers
- NO protection for health care coverage for those living closest to the edge
- NO food assistance for struggling families
- No chance America will come out of this recession stronger and more able to compete economically
A vast majority of economists agree that public investments have a significantly larger “bang for the buck” than tax cuts. For example, Mark Zandi, chief economist for Moody's Economy.com, estimates that $1 in a non-refundable lump sum tax rebate produces only $1.01 in economic activity - compared to much higher returns to the economy for such public investments as food stamps ($1.73), infrastructure spending ($1.59), and aid to states ($1.38).
No Commitment to Restoring the Economy
Republican opposition was not about the size or the components of the package. Last fall, Republicans rejected a much smaller $61 billion stimulus plan, as the economy started to sag. Republicans are choosing ideology and partisan politics over progress for the American people, even at a time of economic crisis.