Could someone please explain why Obama reinstated the

tax cuts to the rich. I can't understand why this was OK. Especially after seeing the information that shows the tax cuts so devastated the economy under GW Bush.

I also do not understand why the Dems are not putting out the message of fact that I found on the internet.

So if anyone can help me to understand please do. I am obviously just not that intelligent.

The data that I found:

~~~~~~

10 years ago tomorrow, the first of the Bush tax cuts was enacted. That 2001 tax cut was followed up by a second tax cut in 2003, passed after Vice-President Dick Cheney reportedly asserted that “deficits don’t matter.” The tax cuts were sold as necessary economic stimulus that would boost job creation and a moribund economy. “Tax relief will create new jobs, tax relief will generate new wealth, and tax relief will open new opportunities,” Bush said on April 16, 2001 as he was pushing for the passage of the first tax cut. Two years later he said, “These tax reductions will bring real and immediate benefits to middle-income Americans…By speeding up the income tax cuts, we will speed up economic recovery and the pace of job creation.”

<snip>

BLEW UP THE DEFICIT: During a 2001 address to Congress, Bush said, “At the end of those 10 years , we will have paid down all the debt that is available to retire. That is more debt repaid more quickly than has ever been repaid by any nation at any time in history.” However, thanks in large part to the Bush tax cuts, the debt ballooned under Bush, with debt held by the public increasing from $3.5 trillion to nearly $6 trillion and gross federal debt going from $5.6 trillion to nearly $10 trillion.In fact, “From 2001 through 2010, the cuts added $2.6 trillion to the public debt, nearly 50% of the total debt accrued during this period.” As the Center on Budget and Policy Priorities found, “the tax cuts account for $1.7 trillion in extra deficits in 2001 through 2008, and $3.7 trillion over the 2009-2019 period.” In addition, the extra debt-service costs caused by the Bush-era tax cuts,amounts “to more than $200 billion through 2008 and another $1.7 trillion over the 2009-2019 period — nearly $330 billion in 2019 alone.

<snip>

TODAY’S GOP DOUBLES-DOWN: Today’s Republicans have not learned from the disastrous tax policies of their predecessors. For starters, Republicans only agreed to last December’s tax deal because it extended the Bush tax cuts for the richest two percent of Americans. Now, both the House Republican budget and the House Republican “jobs plan” released last week include further reductions in the top tax rate from 35 percent to 25 percent. In fact, the “jobs plan” document calls for tax cuts to “Increase American competitiveness to spur investment and create more American jobs.” “Just because we proposed it in the past doesn’t mean it was not a good idea,” said Speaker of the House John Boehner (R-OH) of the House Republican plan. “I think the package that we have represents a lot of traditional ideas and new ideas about how to let the private sector create jobs.” As the Washington Post’s

http://thinkprogress.org/progress-report/ten-years-of-the-bush-tax-cuts/

• Income and Jobs: Inflation-adjusted incomes fell further under George W. Bush than
under any president since reporting began. Unemployment rose 81 percent.
• Poverty: The poverty rate jumped 17 percent from 2000 to 2008, with over 8 million
more Americans living below the poverty line.
• Health Coverage: The number of uninsured Americans increased over 20 percent
to an all-time high of 46.3 million, including a dramatic 157 percent increase in the
population of uninsured Americans over the age of 65.

Bush entered office with the Dow Jones Industrial Average at 10,587, and the average peaked in October 2007 at over 14,000. When Bush left office, the average was at 7,949

By October 2008, due to increases in domestic and foreign spending,<110> the national debt had risen to $11.3 trillion,

Most debt was accumulated as a result of what became known as the "Bush tax cuts" and increased national security spending.<115> By the end of Bush's presidency, unemployment climbed to 7.2%.

In December 2007, the United States entered the longest post–World War II recession

http://en.wikipedia.org/wiki/George_W._Bush

to the upper tax rate.

the democrats had unemployment extension and middle class tax bills standalone, and they were both fillibustered repeatedly by the republicans.

the republicans tied both of them to the upperclass tax rates. had he let them expire, he would have been attackwed for "breaking his promise" not to raise taxes on those making <250k, and he would have been seen as not being able to extend jobless benefits for millions of americans.

the white house wanted the tax issue to be resolved before the novemeber elections, but congress was scared it would cost them in november, so they punted.

The Republicans filibustered the version of the bill that let it expire at the high brackets.

It was all or nothing, and unemployment benefits were being held hostage too, so they would have been cut off.

Don't buy into RW economic philosophy. It caused the mess we are in now.

along with allowing the only income available for millions of unemployed Americans to go away would have sent the economy into full fledged depression. The president understood that.

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in exchange for 6 months extension for SOME of the unemployed.
He did this in the proud tradition of the DLC and other Corporatist democrats who CAMPAIGN ACT like DEMOCRATS while they govern like REPUBLICANS.

...and sending a message to the RW: "Blackmail works with me"

it made the rest of his tenure as president that much harder. They KNOW he will cave at the end. If not the middle, or if given the opportunity, at the early onset of talks.

It was because of the recession that the unemployment extension was needed,
and a middle-class tax hike was very much NOT needed.

The Republicans are trying to Hoover the economy to make Obama lose.

That he should have kept the middle class tax cut(campaign promise), extended unemployment(morality), and raised taxes on the rich(campaign promise).

In my view, he kept one promise and helped people in need. These critics care more about the check mark then the unemployed.

As long as the Bush tax cuts are in place, the recession will not end. More Bush is not the answer.

Extending them for two additional years guaranteed that the recession will go another two years, and an additional two years of unemployment benefits will be necessary to make up for it. It is a self perpetuating situation. Had Obama gotten rid of the Bush tax cuts upon taking office (which is what Bill Clinton did with his 1993 economic plan) we would be in primary balance by next year, according to the CBO. Nothing would provide a jolt to the economy more than a BALANCED BUDGET.

That one hasn't been tried since Herbert Hoover (and I'm not even sure he was that inept).

...which would be the best stimulus possible. We wont come out of the recession until we start paying our bills.

Sorry, more Bush is just not the answer.

That would really help the unemployed!

Leaving us with no income at all would really be the best thing to do. We should probably just go away, and decrease that surplus population.

Plus, additional tax breaks for the middle class + extensions of previous ones passed by the 111th Congress. And above all, it is not just the wealthy who get two years of lower tax rates - it's also everybody else.

Anyone who thinks that there was nothing in there that liberals can't be happy about either hasn't done their homework, or is willfully in denial.

and there are still millions of people unemployed?

As of March, about 14 million people were unemployed and looking for work, according to the household survey. At the time the survey was done, about 8.5 million were receiving some kind of unemployment payments, according to the Labor Department’s Employment and Training Administration. That leaves about 5.5 million people unemployed without benefits, up 1.4 million from a year earlier.

There’s always a certain number of unemployed who don’t receive benefits. They may have just entered the labor force, quit their jobs or not been eligible for some other reason. But workers didn’t quit their jobs at a higher rate over the past year, and more exited the labor force than entered. That suggests the 1.4-million-person change largely reflects people losing their benefits.

For the more than 4 million Americans still receiving extended benefits, the picture isn’t encouraging. The longer they’ve been out of work, the harder it is to find a job. They’ve typically been unemployed for at least 26 weeks, and may have been out of work for as long as 99 weeks, which for many people is the limit.

In the coming months, hundreds of thousands more will drop off the unemployment rolls. The number of people using up their regular 26 weeks of unemployment payments peaked in August 2009 at nearly 800,000 a month. That means a lot of people should be hitting their 99-week limit right about now. And unless Congress does something unexpected, more people with shorter bouts of unemployment will start joining them as the government phases out extended benefits next year.

Either Obama and the Democrats will manage to negotiate another deal with the Republicans that will provide unemployment benefits in exchange for another limited period of time, perhaps in exchange for some targeted budget cuts (this strikes me as most likely), or no agreement will be reached and we will have to simply rough it out. If the second outcome occurs, then the cost in human suffering and drag on the economy will be far greater, but it might - just might - give the issue enough bite to gain some traction in the campaigns of that year, during which the Democrats would have even more ammunition with which to paint Republicans as pissing on the unemployed.

Everything hangs on what the outcome of 2012 is. If the Democrats can win back complete control of Congress, and Obama can hang onto the presidency, then some form of progress might be resumed. Even if we can't win back the House, or we lose the Senate, this may not be out of the realm of possibility if we can continue holding the White House - the GOP can only last so long before they actually have to start working with the Democrats again. One can see a parallel for this in the '90s: after Bill Clinton won reelection in 1996, the Republican congressional leadership expressed a willingness to cooperate with him on a number of issues, and the only thing that prevented the 105th Congress from being a productive period of bipartisan legislating was the erruption of the Monica Lewinsky scandal, which set the political scene of those years on fire.

were so great.. and it was a trade off.. people needed money NOW not two weeks from now or a month from now.

It is a perfectly good criticism though..

I think that extending the tax breaks really is hurting us.. especially since the tax breaks grow exponentially. (i hope I am using that mathematical term correctly) They are much higher at the 10 year mark then they were at the one year mark. That is why Bush was not hurt by them as much. Most people do not realize that.

The needs of those unemployed were greater at the moment.

holding to give us a couple more weeks of government. The hostages were the US people.

As a candidate, Obama promised 95% of the country (right, left, and center), all of those making UNDER 250k, that he would NOT raise their taxes, period.

The GOP knew that if he broke THAT promise, he'd be finished. So they held the middle class hostage.

The Democrats in the House and Senate could have written a bill to extend (or make permanent) the middle class tax cuts. This would have been a winning move during the fall of 2010. But, as is common, the Dems in congress got scared and did not bring such a bill to the floor. Which left the issue in Obama's lap.

Let's imagine Obama let's all the tax cuts expire. If he did that, the only thing you would hear from the GOP and the media is that he broke his promise to the 95% to not raise their taxes. Clips of Obama making THAT promise would be run daily, right next to clips of G.H.W Bush saying "Read My Lips". And in 2012, we get President Romney or Palin (which I see as far worse than any other outcome).

The tax breaks for the rich don't help the economy, but those for the middle class DO, because it gives them more money to spend, and to save, to put towards the mortgage, etc. Take that money from them, and the economy takes a direct hit.

In addition, Obama would have been bashed (in the media and on DU) for not doing enough to help the unemployed.

By doing the temporary extension, he keeps the promise to the 95% (not to raise their taxes), and he helped the unemployed. And yes, he delayed ending the tax cuts for the rich (I would argue a promise delayed is not a promise broken).

By extending them until 12/12, he has positioned them such that he can let them all expire in 2012 after reelection. At that point, the GOP and the media can't hold it over his head with the 95% in the middle class.

I should point out that while about 70% of Americans think that raising the taxes on the rich is the right thing to do, if you ask them are they ok if their own tax break expires at the same time, the number drops to like 25% who say its ok.

Last point ... the GOP's goal in blowing up the defict is to bankrupt the country (or at least be able to claim that's where we are). This is part of the Grover Norquist strategy to kill medicare and social security. The GOP knows that the American people will not willingly give up those programs, unless they think the country is within minutes of collapse.

That was the entire goal of the Bush Presidency.

You are pushing the core GOP meme, which has failed us MISERABLY. Only balancing the budget will save the economy, and the CBO says that ending all of the Bush tax cuts does exactly that. All it takes is a little balls, none forthcoming from the Dems.

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Anyone who thinks that restoring tax rates to the level they were at in the Clinton years would be enough on its own to balance the budget really ought to have another think - and a look at the facts. The Bush tax cuts are just ONE of multiple factors behind our ridiculously outsized deficits at the moment - the ongoing economic crisis is just as culpable for revenue shortfalls.

It is you who is pushing a core GOP meme here, which is that if we balance our budget then the economic situation will somehow magically right itself. The only thing that can "save" the economy is a dramatic increase in consumer demand, and balancing the budget is not going to get us that. What we really need is a fresh round of government investment in the economy, preferably in bulking up our crumbling infrastructure, somewhat along the lines of the WPA and other successful New Deal programs. Failing that however, placing more money in the hands of consumers (the middle class) by lowering their taxes is the next best thing.

Bill Clinton was a decent enough steward of the economy while he was President, but he was by no means the best that we have ever had. Franklin Roosevelt and John F. Kennedy were both far better, and it is their lead that President Obama has been following thus far, which gives me a great deal of comfort.

Balances the budget in 5 years. The core GOP meme is keep the Bush tax cuts no matter how much damage they do. To say getting rid of all the Bush tax cuts is 'pushing the GOP meme' is absurd and you know it. Facts are stubborn things.

Within a year of Bushes 2001 tax cut, the country was borrowing money again. This is exactly what the CBO said would happen. Sorry, more Bush will just collapse the economy.

It’s as if someone took your credit card, ran up $10,000 in debt in your name, sent you a check for $2,000, and then absurdly claimed to be doing you a favor. How any Democrat could fall for something like that is beyond me.



Note: These charts show the deficit impact, in billions of dollars (chart 1) and as a percentage of GDP (chart 2), compared to Primary Balance (outlays excluding net interest payments on the debt) of the 4 primary options with regards to the Bush-era tax cuts. They are:

Bush-Era: Extend all Bush-era 2001-03 tax cuts
Obama: President Obama’s proposal – extend Bush-era tax cuts for that portion of all taxpayers' income under $200k/ $250k
S-PAYGO: Statutory PAYGO’s (“S-PAYGO”) current policy tax exceptions – which accommodate President Obama’s proposals, but with only 2 years of AMT and estate tax relief
Tax Cuts Expire: Let all Bush-era tax cuts expire (CBO Baseline Data)

http://cbo.gov/ftpdocs/117xx/doc11705/08-18-Update.pdf
http://cbo.gov/ftpdocs/27xx/doc2727/entire-report.pdf

You are wrong, friend, when you claim that the "core GOP meme" on economic policy revolves entirely around the Bush tax cuts. If there is a central 'idea' which underpins the intellectual bankruptcy of modern Republican economic philosophy, it is their warped version of fiscal conservatism, to which the Bush tax cuts, based on erroneous supply-side economics, are merely a means to an end. The common misconception which connects your assertions with those of the GOP is that if we were to bring the budget back into primary balance or into surplus, then that would be enough on its own to end our economic woes. This theory relies on the (false) assumption that federal deficits and public debt are the main cause of the economic downturn, as opposed to a crippling lack of consumer demand (driven by a variety of factors including the appalling state of our nation's infrastructure, the lingering effects of the burst housing bubble from the Bush years, and multiple other pressures which drive up the cost of living and depress consumer spending). The fact that you and the advocates of Reaganomics are each pushing completely different solutions to the perceived problem - you (correctly) believe that raising taxes across the board would produce more revenue, whereas a supply-sider (incorrectly) believes that lowering taxes for the wealthy would do the same - does not change the fact that you are both pursuing the same problem, and hence it is indeed you who is pushing the "core GOP meme".

Contrary to any false impressions that you may have gotten thus far, I personally think that it would be a very positive development for this country if taxs rates were to go up, and additional revenue were to come in as a result. Indeed, I will go somewhat further than you - my view is that beyond simply restoring rates to the level they were at during the Clinton years, they should in fact be taken all the way back to the Roosevelt years, when they reached a peak level (for the top bracket) of 94%. This comes with a caveat however: even if this were to happen (obviously a political impossibility) I would only like to see it happen if the government continued to run a large deficit - even larger potentially than the one that is being run at present. Because the simple fact is that despite what fiscal conservatives like to maintain, the simple act of running a deficit, of "borrowing money", of adding to the national debt is not going to "collapse the economy" at any point in the immediate future. In the long run of course, bringing down the size of our deficits and addressing the size of the debt will become a major priority for the country, but for the moment neither of these things is in any way proving a drag on economic recovery (such as it is) or even threatening to be - interest rates haven't been this low in years, and the threat of inflation seems to be minimal at best. The United States has run in real terms considerably larger deficits and maintained a considerably larger national debt than we have today, and when it did so (in the 1940s) that spending fueled the greatest sustained economic boom experienced by any nation in history.

Our problem at the moment is not unsustainably high levels of deficit spending, it is insufficiently high levels of demand in the economy, which is responsible for the abysmal levels of positive economic activity that we are experiencing at the moment. While it would undoubtedly be a fine thing in and of itself to once again have a balanced budget, this would do nothing at all to help out the embattled middle class that is the backbone of our economy, and has been since WWII ended.

Additional revenue coming in from the higher income brackets that benefitted disproportionately from the Bush tax cuts would be fine, but any money that is being taken out of the middle class at the moment would have to be balanced by an equal (or preferably greater) amount of money going back out into the economy through government spending. Otherwise it simply becomes a drag on consumption, and makes the problem worse - exactly the problem that Herbert Hoover ran into when his economic policies exacerbated the Great Depression.

The best way to spur economic growth and reductions in unemployment would be through direct government investment in the economy, but failing that, placing as much extra money as possible in the hands of middle class consumers is the next best thing. This is basic keynesian economics, and evidence of its effectiveness can be found as early as the 1960s, when John F. Kennedy and Lyndon Johnson used tax relief aimed at benefitting the middle class to help fuel the biggest peacetime economic boom in our country's history. The Bush tax cuts were a failed economic policy because they relied upon ludicrous supply-side economics, not because the basic idea of using lower taxes to spur economic growth is a fallacy.

Once the economic downturn has ended, then the time will be right to start reining in the deficit. Until then, economic 'pump-priming' in whatever form is politically possible to achieve, deserves priority. President Obama's decision to negotiate a compromise with the GOP at the end of 2010 on the tax issue was precisely the correct one to make - additional revenue from letting the Bush tax cuts expire would have done nothing to help the economy recover unless the money was put back into the economy in the form of government investment - something very unlikely to happen considering the political context.

Claiming that the deficit is the primary problem is a GOP meme.

Its the one they use to kill all government spending.

It is the core of the GOP's adherence to the Grover Norquist strategy.

If you put a Republican in the White House tomorrow, the deficit would drop off the radar instantly.

The Bush tax cuts are the primary problem.

More Bush is just not the answer, sorry.

“We need to make tough, unpopular choices – obviously letting tax cuts expire is unpopular. But when we ever get serious about the deficit, we will find that the realistic alternatives are even more unpopular.

"And while we have to be sensitive to the fact that we are still in an economic recovery, the additional revenue from a return to the Clinton-era tax rates could be directed immediately towards job creation through investments in direct job programs, such as highway and public transit construction jobs, summer jobs programs, and the AmeriCorps program. Such targeted, temporary job creation spending will not only accelerate the recovery, but the influxes in spending in these areas can be ended a lot easier than reductions in individual income tax rates.

“If we don’t have the political will to end the Bush-era tax cuts now, we certainly won’t have the political will to do it during a presidential election if this Congress enacts a two-year extension of all the rates. Accordingly, the reasonable choice Congress should make now is to allow the Bush-era tax cuts to expire as scheduled at the end of this year and try to restore fiscal sanity to our nation’s capital.”

http://www.bobbyscott.house.gov/index.php?option=com_content&task=view&id=533&Itemid=62

:shrug:

:thumbsup:

Had he not extended the cuts, we'd be yelling about something else that he did or didn't do.

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By doing that, the designer ensured that any simple expiration of the tax legislation would cause every taxpayer to feel a hit. So instead of being able to let it expire, the immediate goal became to pass a new tax law that would keep the bottom bracket but raise the top brackets. So it returned to an issue of political negotiation.

Why regurgitate a question you already know the answer to?

;)

I should have known.

He traded two years of tax cuts for to pass an historic piece of civil rights legislation that would've been dead for another decade if he didn't get it done in the lame duck and passing the START treaty allowed him to continue to credibly conduct foreign policy. Obviously I'd prefer that he wouldn't have had to make that trade, but he did and I'd say it was worth it.