House Minority Leader John Boehner, R-Ohio, pushed for an extension of the Bush tax cuts on Tuesday, but questioned the need to pass over 70 other tax break extensions that failed to pass in the Senate in June.
Presenting his plan to break the ongoing economic uncertainty in a speech before the City Club of Cleveland, Boehner said that employers are scared to death and afraid to invest in the economy. President Obama should announce he will not carry out his plan to impose job-killing tax hikes on families and small businesses, said Boehner. Unless Congress acts, virtually every American will see their taxes go up on Jan. 1, 2011. President Obama has stated he wants to stop some tax hikes, and not others, once again putting the government in the position of picking winners and losers and pitting taxpayer against taxpayer.
Boehner cited an analysis by the non-partisan Joint Tax Committee that found half of small-business income in America would face higher taxes under the presidents plan.
Of course, as if on cue, the same Washington politicians who have spent the last 18 months borrowing and spending our economy into the ground are now fretting over whether we can afford the cost of stopping job-killing tax hikes, he added. Only in Washington would it be acceptable to think that taxpayers should have to pay for the privilege of keeping more of their own hard-earned money.
Democrats disputed Boehners assertion and said they have asked the Joint Tax Committee to further analyze the effects of rolling back the Bush tax cuts on small businesses. They said their analysis so far has indicated that only 2 to 3 percent of small-business owners would be affected.
In calling for a permanent extension of that portion of the Bush tax cuts that benefit the very wealthy, the top 2 percent, he would blow a $700 billion hole in the deficit and send a signal to everybody that were going to continue fiscally reckless policies that will in turn hurt the economy, said Chris Van Hollen, D-Md., chairman of the Democratic Congressional Campaign Committee, during a press conference Tuesday. His plan to roll back many of the contracts that are already in place under the recovery program would put the brakes on job creation that is taking place, in addition to rescinding some of the middle-class tax cuts under the Making Work Pay provisions. Overall, the Boehner plan is another flashback to the Bush economic policies that got us into this mess in the first place.
Boehner also called for the resignations of Treasury Secretary Timothy Geithner and White House economic advisor Lawrence Summers.
President Obama should ask for and accept the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council, said Boehner.
Instead of talking about resignations of members of the administration, he should be issuing a clarion call for a few Republicans to join Democrats in passing the small-business bill on the 13th of September, said House Ways and Means Committee Chairman Sander Levin, D-Mich.
While calling for an extension of the Bush tax cuts, Boehner also criticized the tax extenders legislation that failed to pass the Senate in June (see Senate Again Fails to Pass Tax Extenders Bill).
Instead of making tough choices, Congress ends up essentially rubberstamping a haphazard collection of must do tax policies from one year to the next, he said. The tax extenders bill is a prime example of this. This years extenders bill had 71 separate tax provisions in it, totaling $31.6 billion. More provisions get added in each year, but few if any ever fall out of the package. Theres everything in this bill: the research and development tax credit, special expensing rules for the film industry, an extension and modification of a tax credit for steel industry fuel, the mine rescue team training tax credit, and tax incentives for investment in the District of Columbia. Are they worth it? Many are. But we just go ahead and extend all of them temporarily and usually right at the last minute so Washington can continue pandering to the loudest voices instead of implementing the best ideas.
Democrats disputed Boehners characterization of the tax extenders and highlighted the necessity of extending the research and development credit.
Levin noted that the Democratic members of the Ways and Means Committee have been discussing a review of the tax extenders. We need to spend more time on this, he admitted. Im not saying that we shouldnt look at it, we are, but what hes trying to do is hide their opposition to legislation that would extend what everybody believes should be extended, such as the R&D tax credit. And the tax credit for the steel industry fuel, weve talked about that a lot within our Democratic caucus. Again we are going to look at each and every one of these. But again, that is not an excuse for standing in the way of the extension of the major provisions, including the R&D tax credit. Mr. Boehner and the Republicans have again stood in the door. We have an R&D tax credit that needs to be renewed. All they do is say no, instead of finding ways to say yes.
Democrats are especially incensed that Republicans have blocked passage of the Small Business Jobs Act, calling the bill a mini-TARP, in reference to the controversial Troubled Asset Relief Program that helped bail out the banks. Levin, Van Hollen and House Small Business Committee chair Nydia Velazquez urged Republicans to help them pass the bill when Congress returns from recess next month. President Obama has made the small-business bill his top legislative priority in recent weeks.
By tradition and historically, big banks basically do not lend to small businesses, but community banks do, said Velazquez. We have to incentivize community banks to lend and we have to put in safeguards to make sure the money goes to small businesses. Thats exactly what we do in this small-business lending bill. We are going to make sure those big banks that are sitting on trillion-dollar profits and took TARP money will not be able to participate.
Boehner said that Obama should call on Democratic leaders in Congress to stop obstructing Republicans attempts to repeal the new health care laws job-killing 1099 mandate. He pointed to the provision in the health care bill requiring businesses large and small to report any total purchases from another company that amount to more than $600 per year.
If a landscaper wants to buy a new lawnmower, or a restaurant needs a new ice-maker, they have to report that to the feds, said Boehner. If youre a mom-and-pop grocery store, and you buy $1,000 worth of merchandise from 15 different vendors, thats 15 different forms you have to file. What is the point of making employers and entrepreneurs spend $17 billion to send all this paperwork to Washington, where its going to cost about $10 billion to log it in and file it away? Talk about overhead.
Boehner noted that last month, Republicans attempted to force a vote on the House floor to repeal the job-killing mandate.
Democratic leaders blocked that vote, and instead attempted to use this as an opportunity to impose another job-killing tax hike on U.S. job creators, he argued.
Democrats countered that Republicans voted against a bill, the Small Business Tax Relief Act, which would have repealed the 1099 requirement because it included provisions that would have closed tax loopholes for companies that ship jobs overseas (see Small Business Tax Relief Act Fails to Pass in House). They claim the reason is that large companies opposed the measure. The Senate has scaled back the 1099 requirements in the latest version of the Small Business Jobs Act to attract Republican support (see Senate Eases 1099 Woes in Small Business Bill).
He talks about repealing 1099, said Levin. To show how politically charged his speech is, they voted against its repeal and now hes blaming Democrats for not repealing [it].
In his speech, Boehner also criticized Democrats for passing a recent extension in unemployment benefits for the long-term jobless.
Heres an example of how out-of-hand things have become: We have recently seen Washington politicians take victory laps for spending billions of dollars to continue providing unemployment insurance, he said. These benefits are held up as a jobs plan and stimulus for the economy. Keeping workers on the unemployment rolls instead of fostering small-business and private sector growth is not a responsible jobs plan. The American people would agree unemployment insurance is an important safety net, but it is not a responsible jobs plan.
Levin objected to Boehners characterization: How does he defend, coming from Ohio, opposing the extension of unemployment compensation when two-and-a-half million people were losing them?" he asked. "In terms of stimulus for the economy, virtually every economist says that providing unemployment insurance is a source of stimulus because people who receive it spend it. We dont hold it up as a jobs plan. Our plan for jobs includes this provision for small business, and Mr. Boehner needs to explain why hes voted against it and why hes not asking the Senate Republicans to join in passing it.
Democrats asked Republicans to lend their support in passing the Small Business Jobs Act. There is a role for the federal government to play, said Velazquez. We ask the Republicans to step up to the plate and pass this small-business lending bill.
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