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Tax Cut Negotiations Continue, Udall Stands Firm

12:01 PM ET, 12/11/2010
The Cleveland Plain Dealer reports, a group of Senators including Mark Udall of Colorado have an alternative to the Bush tax cut deal between President Barack Obama and the GOP:

[E]ight Democrats including Ohio's Sherrod Brown wrote to Majority Leader Harry Reid to propose capping the tax breaks for incomes over $1 million. People making more than that would go back to Clinton-era tax rates.

The savings should be used to shore up Social Security, Brown and the others wrote. [Pols emphasis]

Class warfare? Not at all, these Democrats say.

"Success in America should rightly be celebrated, but the very wealthy do not need bonus tax cuts and America cannot afford to give them," said the letter, signed by Brown, Jeff Merkley (OR), Mary Landrieu (LA), Mark Begich (AK), Daniel Akaka (HI), Al Franken (MN), Mark Udall (CO), and Barbara Boxer (CA).

"As you know, the agreement would require American taxpayers to borrow over $50 billion in order to give, on average, $100,000 in additional annual tax cuts to people earning over $1 million per year. These bonus tax cuts are on top of the $43,000 per year that millionaires will receive in tax cuts on their first million dollars of income. The Congressional Budget Office ranked these tax cuts dead last in terms of effectiveness in boosting economic growth and job creation. In a time of urgent national needs and long-term deficits, we believe the country has higher priorities than these huge tax cuts for the very wealthy."

The full text of their letter to Majority Leader Harry Reid follows--this proposal represents a marked contrast to the original deal announced this week, which as a key feature stripped $120 billion from Social Security for the payroll tax cut. That provision, we might add, was supposed to be the "carrot" that motivated undecided Democrats to sign on.

Dear Leader Reid:

The tax package announced by President Obama and Congressional Republicans includes some important provisions that we strongly support, but also a deeply misguided allocation of resources at a time that the United States does not have resources to waste.

The Senate, however, can make it better. We ask that you ensure an opportunity for the Senate to vote on an amendment that will give the American people a clear choice whether they would prefer to give bonus tax cuts to the very wealthiest among us, as the package currently proposes, or to use these resources to strengthen Social Security.

Success in America should rightly be celebrated, but the very wealthy do not need bonus tax cuts and America cannot afford to give them. As you know, the agreement would require American taxpayers to borrow over $50 billion in order to give, on average, $100,000 in additional annual tax cuts to people earning over $1 million per year. These bonus tax cuts are on top of the $43,000 per year that millionaires will receive in tax cuts on their first million dollars of income.

The Congressional Budget Office ranked these tax cuts dead last in terms of effectiveness in boosting economic growth and job creation. In a time of urgent national needs and long-term deficits, we believe the country has higher priorities than these huge tax cuts for the very wealthy.

Specifically, we propose to amend the package to restore tax rates on income over $1 million per year to the Clinton-era rates, and to dedicate the resulting revenues to shoring up the Social Security trust fund. The President's National Commission on Fiscal Responsibility and Reform noted that in 2037, Social Security will exhaust its trust fund and be unable to pay full benefits, and consequently proposed a number of benefit cuts for seniors.

Improving Social Security's finances is, in our opinion, a more important national priority than directing tens of billions of dollars in taxpayer money to a relative handful of families.

We have grave misgivings about the recent tax agreement. We hope that the Senate can improve on it. We look forward to working with you to ensure a vote on our amendment to strengthen Social Security in lieu of bonus tax cuts for people who are doing quite well.

Thank you.


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Comments

I am a 99er in CO and want to thank Senator Udall for standing with Bernie Sanders and the others in opposition to this bill. I'm an unemployed business analyst that has been fighting for the 99ers since my UI benefits ran out in May.

I published an article this morning about Goolsbee's comments re the 99ers as well as info on how to have your letters hand-delivered to Sen Sanders in VT.
http://www.examiner.com/unemployment-in-denver/maddow-boldly-moves-the-99er-issue-to-the-forefront-join-the-99ers-new-effort. Here is part of what I wrote:

MSNBC's Rachel Maddow stepped up in a very bold way last night in her inteview w/ Austin Goolsbee. She only had a chance to ask a few questions and she ended with a bombshell question: "What about the 99ers".

For those who don't understand the 99ers issue and what the President has NOT done for 4.5 (soon to be 8 million) people, please take a minute and watch the video in my article. The response by Obama's administration is totally short-sighted, cruel and unacceptable.


I would like to be so bold as to ask you to read my 'open letter' to my Congressional representatives, Majority Leader Harry Reid and Speaker Pelosi. This is my personal plea to members of Congress to help which will soon be 8 million people (99ers).

Here is part of what I wrote in my letter:

The UI extensions included in the President's compromise would cost $56b; that is 6.2% of the total price tag. That is what President Obama and the Republicans are willing to spend to help those who have suffered the most in this recession. Like many 99ers, I am absolutely stunned with President Obama's unwillingness to help 8 million unemployed, middle-class professionals who were once thriving and successfuly participating in this country's economy and the so-called 'American Dream'.

The provisions related to the estate tax in the President's 'compromise' are outlandish and provide NO economic return.
Conversely, according to the government's own economists, giving 8 million unemployed workers money which they will spend immediately, provides the absolute best ROI - return on investment; a fundamental theory of finance. Giving money to 8 million unemployed workers will create demand for goods and services; a fundamental theory of economic growth.

Put another way: rich dead people get more out of this deal than the long-term unemployed are getting. The long-term unemployed are getting nothing out of this deal.


http://www.examiner.com/unemployment-in-denver/open-letter-to-my-congressional-representatives-senator-reid-and-speaker-pelosi


Posted by: KWiedemer | December 12, 2010 9:32 AM | Report abuse

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