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U.S. President George W. Bush (L) delivers comments on a meeting with the House Republican leadership as Minority leader John Boehner (R-OH) looks on at the White House in Washington May 7, 2008.    REUTERS/Jim Young     (UNITED STATES)
How far will Republicans go to save George W. Bush's economic legacy?
A new White House report outlines the economic danger of allowing automatic tax increases on income below $250,000 to take effect at the end of the year:
Americans could spend nearly $200 billion less next year on cars, clothes, furniture and other consumer products than they would otherwise if automatic tax increases take effect as currently scheduled, the White House warned in a report issued Monday morning.

Such a crimp on demand would curb the growth of real consumer spending by 1.7 percentage points in 2013 and slow the growth of the overall economy by 1.4 percentage points, according to the report prepared by the President’s Council of Economic Advisers.

The report focused entirely on the impact of Bush-era tax cuts expiring for middle-class taxpayers at the end of the year and a failure to adjust the Alternative Minimum Tax so that it does not suddenly apply to millions of taxpayers who have not paid it in the past. It made no effort to look at the economic impact of deep military and domestic spending cuts also due to take effect in the new year.

The Senate has already passed legislation that would continue current tax rates for all income below $250,000 and President Obama has said he would sign it, but House Republicans thus far have refused to act. The reason is simple: passing the Senate legislation would decouple the Bush tax cuts for the wealthy favored by the GOP from the middle-class tax cuts favored by Democrats and the president. Decoupling the tax cuts would take away the GOP's ability to hold the middle-class tax cuts hostage, effectively guaranteeing that the tax rate on income above $250,000 would return to Clinton-era levels.

Republicans say they supports extending middle-class tax cuts and are willing to raise revenue from higher income taxpayers, but unless and until they end the hostage crisis and agree to decouple the tax cuts, there's no reason to take them seriously.

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Comment Preferences

  •  I do wish some Democrat would stand up (18+ / 0-)

    and say, "If this congress wants to reduce the deficit, they should work together to create jobs for those left unemployed by current economic conditions.  Jobs will enable workers to pay taxes and eliminate reliance on government support payments.  Jobs should be the congress's number one consideration - even if the government needs to create government jobs to put these people back to work."

    But alas, every Democrat seems to have fallen for this "cut spending and raise taxes" mania, and no one seems to be proposing a serious plan for putting people back to work and/or increase the minimum wage.

    "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

    by SueDe on Mon Nov 26, 2012 at 06:35:31 AM PST

    •  And I haven't heard any discussion of the estate (10+ / 0-)

      tax, worries me greatly.  The current law exempts $5+M from tax.  We need to drop the exemption amount--both as a revenue raiser and as a means of keeping the playing field somewhat more level.  

      There should not be a class of citizenry that is privileged merely because of birth and not because of its accomplishments.

      •  $5million is aboout the value of a family farm (0+ / 0-)

        in New England. And many of the farm families are in no way able to pay inheritance taxes on a farm their family bought when it was $5/acre in the 1920s. That's why the lower limit was set. Lowering that limit would force many small farmers to plant the last crop: a Subdivision. Market forces are already making that happen and without farms, no food.
        It's the upper reaches that need to be dealt with, the several hundred million dollar fortunes of the Robber Barons that pass down through generations who are still benefiting from their great grandfather's ruthlessness.
        Inheritance taxes along with Cap Gains and Interest&Dividends, were cut way back under BushCheney, they even had one year when they were Zero.
        It's those taxes that must go back to Clinton levels if not higher.

        If I ran this circus, things would be DIFFERENT!

        by CwV on Mon Nov 26, 2012 at 08:19:29 AM PST

        [ Parent ]

    •  The Republicans want any tax increase to hit (1+ / 0-)
      Recommended by:
      drmah

      the middle class the poor and have the least impact on the rich.

  •  Turn Biden Loose On The Republican House (6+ / 0-)

    These bushboy tax cuts should have been recsended years ago. If they hadn't been enacted in the first place we would have been a helluva lot better off.

    Abolish The Filibuster Now!

    by Ky DEM on Mon Nov 26, 2012 at 06:39:14 AM PST

    •  Yes, but the Democrats (7+ / 0-)

      were complicit in approving Bush's tax cut bills.  The Obama administration, by sitting on their hands and not making the 2010 election just as important in the minds of their voters as the 2008 election, must accept at least part of the responsibility for turning the House over to the Republicans, and taking it back hasn't turned out to be as easy as some Democratic operatives expected.  House Republicans' obstructionism may be weakened (and it may not be), but it's certainly still a major problem.

      "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

      by SueDe on Mon Nov 26, 2012 at 06:55:19 AM PST

      [ Parent ]

      •  We are talking about the OBAMA tax cuts now (2+ / 0-)
        Recommended by:
        Ky DEM, SueDe

        That is a FACT. Bitch all you want about Republican obstruction...but Obama GAVE the GOP two years of heinous and fruitless and deficit-ruining and job-killing tax cuts in 2010. HE SIGNED THE LAW.

        He should have just let them LAPSE. Why didn't he? Because an extra 3.6% tax hike would ruin the 'recovery'? When now the CBO and CRS say that if the tax hikes expire, it won't affect it at all?

        Who do we believe? I know this much: In order to rid ourselves of the real reason we are in so much deficit today, we need to return to the Clinton tax rates. Doing NOTHING achieves that--let them lapse!

        And NO ONE is saying this except Atrios and every other sane economist.

        "I feel a lot safer already."--Emil Sitka

        by DaddyO on Mon Nov 26, 2012 at 02:11:33 PM PST

        [ Parent ]

        •  The one thing that will do the most (0+ / 0-)

          to rid ourselves of "the real reason we are in so much deficit today" is to put people to work and pay them decent wages.

          "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

          by SueDe on Mon Nov 26, 2012 at 03:18:37 PM PST

          [ Parent ]

  •  Will the GOP propose spending cuts? (7+ / 0-)

    They demand spending cuts and talk about 'entitlements', but they seem very reluctant to specify what they want to cut.  I think they want to make Obama propose them so they can run against it.

    A new birth of freedom..

    by docterry on Mon Nov 26, 2012 at 06:39:51 AM PST

    •  They want Romney's economic plan (1+ / 0-)
      Recommended by:
      Laconic Lib

      even though he lost. And why Paul Rayn is at the bargaining table.

      That alone should infuriate house Dems, enough to wait for the tax cuts to simply expire.

      No deal worth having with him at the table.

      If not us ... who? If not here ... where? If not now ... when?

      by RUNDOWN on Mon Nov 26, 2012 at 09:15:59 AM PST

      [ Parent ]

  •  Obama and the Big Dog should travel the Hustings (7+ / 0-)

    from now till Christmas, just as Bill and Al did after the '92 convention.  The President and his Secretary of Explaining Things can end Dubya's economic travesty and lock in the realignment by decoupling the tax cuts.

    I don't think Obama should spend one hour in Washington until the House extends the middle class tax cuts.  What's to discuss?  

    "And now we know that government by organized money is just as dangerous as government by organized mob." -- FDR

    by Mogolori on Mon Nov 26, 2012 at 06:39:55 AM PST

  •  Let me fix that last paragraph for you... (7+ / 0-)
    Republicans say they supports extending middle-class tax cuts and are willing to raise revenue from higher income taxpayers, but unless and until they end the hostage crisis and agree to decouple the tax cuts, there's no reason to take them seriously.
    Republicans say {XXXXX}, but there's no reason to take them seriously.

    Ta-da!  Now it's useful for all kinds of policy discussions.

    You're welcome.

    adm

    honi soit qui mal y pense

    by admadm on Mon Nov 26, 2012 at 06:40:45 AM PST

  •  Hiding from electoral reality (2+ / 0-)
    Recommended by:
    Gentle Giant, RUNDOWN

    The world of Grover Norquist and the Tea Party radicals driving the agenda of the Republican Party really is a fantasyland.  Conservatoires not only denied the accuracy of their "skewed" polls before the election, they are acting like nothing changed and that President Obama did;'n twin a resounding landslide mandate earlier this month. Americans voters made it known loud and clear that tax breaks for the rich while forcing draconian cuts on the middle class and working folks will not be the path of our country. The GOP can either accept this reality, or else they can whine on fox News and slowly drift off into irrelevance as a political player in the United States.   -  progressive

    •  They won't "drift into irrelevance" (6+ / 0-)

      as long as they control the House.  They have to be worked with, or their votes peeled off to support Democratic proposals, or their voters have to rise up and register displeasure with their positions, to for a change for the better.  

      Already House Republicans are making the charge to their constituents that "tax hikes on the rich" actually means "tax hikes for YOU."  Republicans consistently refer to "Obama tax hikes," not "tax hikes on the rich."  I can't count the number of Republican voters who have voiced this belief on the public airways since the election.

      "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

      by SueDe on Mon Nov 26, 2012 at 07:07:12 AM PST

      [ Parent ]

      •  gopers can still remain relevant on a state and (0+ / 0-)

        local basis, while losing consistently in national elections, thereby futhering their states rights advocacy.

        The goal being the prevention of enacting helpful legislation by knuckle dragging governors.

  •  I missed "W"'s appearance at the Repub convention. (2+ / 0-)

    Is it true that he said he was going to start working out with the Dallas Cowboys cheerleaders in the role of mascot javelina?

  •  This: (3+ / 0-)
    Recommended by:
    bear83, RUNDOWN, Brooke In Seattle
    Republicans say they support extending middle-class tax cuts and are willing to raise revenue from higher income taxpayers, but unless and until they end the hostage crisis and agree to decouple the tax cuts, there's no reason to take them seriously.
    And we have such a paucity of reasons to take them seriously beside this issue. You'd think they'd be eager to improve their image.

    I believe in democracy, civil liberties, and the rule of law. That makes me a liberal, and I’m proud of it. - Paul Krugman

    by Gentle Giant on Mon Nov 26, 2012 at 06:50:07 AM PST

  •  Does the Senate bill cut the capital gains (2+ / 0-)
    Recommended by:
    Rube Goldberg, bear83

    tax rate for those making under $250,000? Does it change the capital gains tax rate for the rich only, for everybody, or leaves it the same?

    "Force is as pitiless to the man who possesses it, or thinks he does, as it is to its victims; the second it crushes, the first it intoxicates.” Simone Weil

    by chuco35 on Mon Nov 26, 2012 at 06:56:42 AM PST

  •  This is really needless fearmongering on the (2+ / 0-)
    Recommended by:
    hmi, RUNDOWN

    part of the White House - which for political reasons might be OK - but still, it is just a * tad * unseemly!

  •  Jed. Please. (4+ / 0-)

    Do we have to keep seeing pictures of that guy?

    It's hard enough that we still have to look at Rmoney!

    "Politics is like driving. To go backward put it in R. To go forward put it in D."
    Four More Years! How sweet it is!!!

    by TrueBlueMajority on Mon Nov 26, 2012 at 07:11:13 AM PST

  •  Whatever happens, (4+ / 0-)

        I'm just about "grand bargained" out. To the bully pulpit Mr. President! You can do this.

    The Republican motto: "There's been a lot of progress in this country over the last 75 years, and we've been against all of it."

    by Hillbilly Dem on Mon Nov 26, 2012 at 07:16:31 AM PST

  •  Correct me if I am wrong (2+ / 0-)
    Recommended by:
    bear83, RUNDOWN

    But this White House report is talking about what the impact on the economy would be if the tax cut on incomes below $250,000 were to expire and stay expired for the remainder of 2013.

    What would the economic impact be if the tax cuts were to expire on Jan 1st and then be passed back into law on say, Feb. 1st, with a stipulation that they would be retroactive back to the original Jan. 1st deadline?

    Everyone talks about the expiration as if they are permanent. They are permanent only to the accountants who have to base their calculations on what is known (when the cuts will expire), not on what is unknown (when they be restored in future legislation).

  •  Giant images of... (3+ / 0-)
    Recommended by:
    cybersaur, RUNDOWN, Brooke In Seattle

    Huge pics of Bush, Cheney, Boehner, Limbaugh, etc popping up unexpectedly on the DK screen when I refresh, HURT MY EYES!!  Please stop it!  Especially those first two, whom we deserve never to lay eyes on again!

  •  gopers have little sticks. Indeed. (0+ / 0-)
  •  Repubs are holding out on taxes for two reasons (1+ / 0-)
    Recommended by:
    bear83

    One, to use as a negotiating card in exchange for what they really want, big cuts to entitlements. And two, because they know that if they fold on taxes, especially without getting anything big in return, they will have been broken and their future negotiation position will be much weaker.

    Then again, 2014 isn't that far away, and they should know that if they refuse to budge, they will likely be seen as putting partisan politics over the good of the country and be blamed for any ensuing recession, and lose big in the midterms.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Mon Nov 26, 2012 at 07:44:13 AM PST

    •  They know they can't cave (5+ / 0-)

      because if Dick Lugar can lose a primary, any of them can.

      Their concern over maintaining a grip on power trumps any concern for the welfare of the country.

      Filibuster reform now. No more Gentleman's agreements.

      by bear83 on Mon Nov 26, 2012 at 07:51:27 AM PST

      [ Parent ]

      •  And if they don't cave (2+ / 0-)
        Recommended by:
        bear83, Brooke In Seattle

        they'll lose the general election. It's a lose-lose for them and a win-win for us.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Mon Nov 26, 2012 at 08:14:24 AM PST

        [ Parent ]

        •  It's hard to know, and easy to hope (0+ / 0-)

          All that money purportedly on the sidelines waiting to be "invested in the economy and creating jobs" as soon as "certainty" sets in might instead be spent in keeping the House safely purchased and in the bag.  Citizens United changes everything

          For our own good, of course..

          Maybe one day the Fourth Estate will take their jobs seriously. Or not..

          by Anthony Page aka SecondComing on Mon Nov 26, 2012 at 08:39:01 AM PST

          [ Parent ]

          •  CU changed nothing in this election (1+ / 0-)

            It did, though, change a lot in the 2010 election, which made it possible for the GOP to keep the house. So we'll see. Apparently CU is most effective at the local level. Which I think proved that OFA's abandonment of the 50 state strategy and snubbing progressives was a huge mistake and us "haters" were right all along.

            Fight or die.

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Mon Nov 26, 2012 at 09:52:48 AM PST

            [ Parent ]

            •  I think CU may have saved a few seats (0+ / 0-)

              The run of the mill "Tea-Party" voter or elected official may be dumb as a bag of rocks, but I suspect the money-men at the PACs will learn from their mistakes.

              For instance - Blatant voter suppression backfired in some areas, but without a Presidential race in the mix, the long lines may dissuade enough voters from exercising their rights to turn a race.

              Swift-boating Dems in close races right before the election will be easy as can be if funds aren't an issue

              Agree 100% regarding the 50 state strategy. Even beyond that. Every voter in every district should be at least informed as to their choices and the repercussions of their votes (or not voting.)

              That's expensive, and where the money matters.

              Fight to the death.

              Maybe one day the Fourth Estate will take their jobs seriously. Or not..

              by Anthony Page aka SecondComing on Mon Nov 26, 2012 at 11:16:51 AM PST

              [ Parent ]

    •  I hate the Republican "brinkmnship" policy, but (0+ / 0-)

      the reality, they can play this game by holding the House. In my state, Indiana, they gerrymandered Moderate Republican districts out of existence and crippled  Democratic districts. I fear we all are being held hostage by a few, very wealthy puppeteers behind the screen.  

  •  Which is why we let it expire (1+ / 0-)
    Recommended by:
    coppercelt

    The problem right now is that the situation of non continuance is seen as a tax increase.  If they expire, then we will be in a situation where Republicans will have to vote against a tax cut for the middle class.  We will also be in a situation where retail sales are going to drop, so hopefully that will give some motivation to vote for the middle class tax cut, which will result in immediate cash in the economy.  Also note in January when paychecks go down this will look like a pay cut to employees, thus increasing pressure on employers to raise pay.  

    Really, the Bush tax cuts were only ever there to benefit the wealthy.  They get an increase in discretionary income, while allowing corporate profits to increase by allowing employees to gain a pay increase though lower taxes rather than actual compensation.  It was a boondoggle constructed by the neocons to put the country into recession and limit power of the average person.  And the average person is so willing to fight over minimum wage jobs that they were more than happy to be suckered in.  It must go.

  •  We should dive on off the cliff, (0+ / 0-)

    let all the tax breaks expire, then cut the taxes for less than 250,000.  No way the Republicans block it.

    This "Trickle Down" thing has turned out to be somebody pissing on my leg and tellin' me it's rainin'.

    by swtexas on Mon Nov 26, 2012 at 09:41:10 AM PST

  •  Why make this so hard? (0+ / 0-)

    The Pres gets on TV - prime time.

    Explains in simple English w/ Spanish subtitles, so even the R's will understand it (and can't spin it), why the tax cuts will expire - never intended to be forever, driving the economy worse, etc, etc. Everyone here on KOS could do it, this is the easy part.

    Tell them how the R "leadership" wants the ship to sink and for the middle / lower to lose their "entitlements". Don't be coy - call them out. Something like, "The R's do NOT want you to ever have Social Security and Medicare / Medicade which we, the D's, will NOT allow to happen".

    Tell the middle / lower income folks that the day after the tax cuts expire a bill will be introduced by the D's to insure that tax rates do NOT go up on the middle / lower income folks. Therefore there is NO CHANGE to 98% of the people in the US.

    Remind those folks to TELL their representatives to approve the tax CUTS!!!

    If they don't - unleash the Biden / Clinton team on every show that will have them.

    Pressure from the voters (and the likely hood the R's might actually lose their jobs) is the ONLY thing that will force the R's hand.

    The key is to LAY IT ON THE LINE - DOUBLEDARE THEM!!

    Who do you believe, Waffle Willard or Lyin' Ryan???

    by Da Rock on Mon Nov 26, 2012 at 09:48:34 AM PST

  •  THOSE TAX CUTS ARE NOT GEORGE W. BUSH'S (0+ / 0-)

    They are OBAMA'S TAX CUTS FOR MILLIONAIRES AND THE REST OF US. President OBAMA signed them into law in 2010. As soon as he did that, he took ownership of them 100%. They ARE HIS.

    Anyone who says or implies otherwise is lying. Obama didn't HAVE to sign those tax cuts into law. He CHOSE to do so. He could have allowed them to lapse...just like now.

    Will he? Will the House go along with it? Or what other fresh horror will they cook up and Obama go along with THIS time?

    "I feel a lot safer already."--Emil Sitka

    by DaddyO on Mon Nov 26, 2012 at 02:07:38 PM PST

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