Rep. Salazar should abandon his Blue Dog stance on Bush tax cuts

Competing letters have been submitted to House Majority Leader Nancy Pelosi by Democrats. One group is determined to end the Bush tax cuts for the richest two percent of Americans. The other favors the Republican policy of extending the tax cuts for all income brackets.

Prior to the election, John Salazar signed a letter to Pelosi urging extension of the Bush tax cuts in all taxpayer brackets. Concerned that “raising any taxes right now could negatively impact economic growth,” the letter invoked, “the continued fragility of our economy and slow pace of recovery.” It concludes, “we … believe in time of economic recovery it makes good sense to maintain things as they are in the short term.”

These Blue Dog Democrats also claim ending the tax cuts would hurt small businesses. However, the Tax Policy Center states, “Roughly 97 percent of small businesses would not be affected at all by increases in the top two tax rates.”

In the past, Salazar has justified votes to weaken or defeat Obama policies as fiscal responsibility. However, on extending tax cuts for the richest Americans, Salazar’s position is indistinguishable from the Republicans. They want to continue Bush tax cuts for the richest two percent, without regard for the effect on economic recovery, the budget or the deficit.

The basis for the Republican argument is that all tax cuts, including those for the richest two percent, stimulate the economy. While this may be the case to some degree, not all tax cuts stimulate equally. Some cost much more than they contribute to the economy.

When the independent Congressional Budget Office earlier this year evaluated policies on the basis of their ability to stimulate economic growth, tax cuts for the rich were not among the most effective methods.

Increased aid to the unemployed, the report concluded, was the most effective short-term stimulation. Investment in infrastructure and more aid to the states also ranked high. The least efficient method of boosting economic grown, according to the CBO, is extending the Bush tax cuts.

The Center for American Progress, using figures from the CBO and the Joint Committee on Taxation estimates continuing the Bush tax cuts for Americans making over $250,000 annually, will directly reduce revenue to the federal budget by about $690 billion over the next 10 years. Add the increased interest that would accrue to the debt, and the total cost is almost $830 billion over 10 years.

If Salazar is serious about the fiscal conservatism he advocates, how can he justify adding over $830 billion to the deficit? Republicans have tried since the Reagan years to claim that tax cuts pay for themselves. Growing deficits under their administrations show otherwise. The Bush tax cuts are no exception.

Contrary to his conservative Republican counterparts, Salazar did vote in favor of extending unemployment benefits. He should also consider abandoning the discredited GOP position that tax cuts for the rich do not add to the deficit or increase unemployment.

“This is flat wrong,” says the Center for American Progress. In the three years after the Bush tax cut took effect, 600,000 jobs were lost, the center said.

Democratic support in the House is growing for Obama’s proposal to permanently extend tax cuts for the middle-class, while allowing the cuts for the wealthiest two percent — those making over $250,000 per year — to expire. Polls have shown that a majority of voters, including those in Colorado, favor this approach.

The appeal to Pelosi from Democrats dedicated to ending the Bush tax cuts for the wealthy says, “We must show the American People that our Democratic Majority stands for them — people who have worked hard, played by the rules and depend on these tax breaks to make ends meet. We also need to get serious about cutting our budget deficit by allowing the Bush tax cuts for the rich to expire.”

As a lame duck, Salazar has nothing to gain by a vote against the mainstream of his party, but Colorado and the nation have much to lose if the Blue Dogs prevail. Come home, John.

Bill Grant lives in Grand Junction. He can be reached at .(JavaScript must be enabled to view this email address).


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