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Dear MoveOn member,
This is a huge day in the fight to end the Bush tax breaks for the rich.
Later today, the Senate is expected to vote on the awful White House tax deal—and no one knows how this vote is going to come out.
Opposition to the deal has been growing by the hour ever since the deal was announced. And now's the time for progressives to demand that our voices be heard—just like Bernie Sanders did on Friday when he spoke on the floor of the Senate for an incredible nine hours in opposition to the deal.
That's why today we're organizing a massive call-in day that we're calling the Phone-In Filibuster to stop the millionaire tax bailout. Can you join the effort by calling Senators Barbara Boxer and Dianne Feinstein today? Tell them to oppose the deal to extend the Bush tax breaks for the rich. Here's where to call:
Senator Barbara Boxer
Phone: 202-224-3553
Senator Dianne Feinstein
Phone: 202-224-3841
Then, please report your call by clicking here:
As President Obama said, the middle class is being held hostage by the Republicans, and for ransom they're demanding a massive tax break for the rich.1
But President Obama has agreed to pay that ransom by extending the Bush tax breaks for the top 2% of earners, lowering the estate tax, and cutting the payroll tax for one year, which would undermine the key source of revenue for Social Security.2
We've surveyed MoveOn members since the deal was announced, and most members oppose the deal. The richest Americans are likely to reap the lion's share of the benefit from this deal—and economists agree that tax breaks for the top 2% are the least effective for creating jobs.3
Not only is this terrible economic policy—it sets an awful precedent. Because if the Democrats reward the Republican hostage-takers now, it will only encourage them to take more hostages in the future.
That's why House Democrats rejected the deal last week, and now it's up to Senate Democrats to do the same. You can help make that happen by joining today's Phone-In Filibuster. Here's where to call:
Senator Barbara Boxer
Phone: 202-224-3553
Senator Dianne Feinstein
Phone: 202-224-3841
Then, please report your call by clicking here:
Thanks for all you do.
–Nita, Robin, Steven, Ilyse, and the rest of the team
Sources:1. "President Obama: Tax Cuts for Wealthy Are Republicans' 'Holy Grail,'" ABC News, December 7, 2010
http://www.moveon.org/r?r=205455&id=25472-7187494-ylLjR6x&t=5
2. "Deal Struck on Tax Package," The Wall Street Journal, December 7, 2010
http://www.moveon.org/r?r=205416&id=25472-7187494-ylLjR6x&t=6
3. "Will Obama really end tax cuts for rich in 2012?" The Washington Post, December 10, 2010
http://www.moveon.org/r?r=205475&id=25472-7187494-ylLjR6x&t=7
"Rich Americans Save Tax Cuts Instead of Spending, Moody's Says," Bloomberg, September 14, 2010
http://www.moveon.org/r?r=90354&id=25472-7187494-ylLjR6x&t=8
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Block Those Metaphors
By Paul Krugman
NY Times Op-Ed: December 13, 2010
Like it or not - and I don't - the Obama-McConnell tax-cut deal, with its
mixture of very bad stuff and sort-of-kind-of good stuff, is likely to pass
Congress. Then what?
The deal will, without question, give the economy a short-term boost. The
prevailing view, as far as I can tell - and that includes within the Obama
administration - is that this short-term boost is all we need. The deal, we're
told, will jump-start the economy; it will give a fragile recovery time to
strengthen.
I say, block those metaphors. America's economy isn't a stalled car, nor is
it an invalid who will soon return to health if he gets a bit more rest. Our
problems are longer-term than either metaphor implies.
And bad metaphors make for bad policy. The idea that the economic engine is
going to catch or the patient rise from his sickbed any day now encourages
policy makers to settle for sloppy, short-term measures when the economy
really needs well-designed, sustained support.
The root of our current troubles lies in the debt American families ran up
during the Bush-era housing bubble. Twenty years ago, the average American
household's debt was 83 percent of its income; by a decade ago, that had
crept up to 92 percent; but by late 2007, debts were 130 percent of income.
All this borrowing took place both because banks had abandoned any notion of
sound lending and because everyone assumed that house prices would never
fall. And then the bubble burst.
What we've been dealing with ever since is a painful process of
"deleveraging": highly indebted Americans not only can't spend the way they
used to, they're having to pay down the debts they ran up in the bubble
years. This would be fine if someone else were taking up the slack. But what's
actually happening is that some people are spending much less while nobody
is spending more - and this translates into a depressed economy and high
unemployment.
What the government should be doing in this situation is spending more while
the private sector is spending less, supporting employment while those debts
are paid down. And this government spending needs to be sustained: we're not
talking about a brief burst of aid; we're talking about spending that lasts
long enough for households to get their debts back under control. The
original Obama stimulus wasn't just too small; it was also much too
short-lived, with much of the positive effect already gone.
It's true that we're making progress on deleveraging. Household debt is down
to 118 percent of income, and a strong recovery would bring that number down
further. But we're still at least several years from the point at which
households will be in good enough shape that the economy no longer needs
government support.
But wouldn't it be expensive to have the government support the economy for
years to come? Yes, it would - which is why the stimulus should be done
well, getting as much bang for the buck as possible.
Which brings me back to the Obama-McConnell deal. I'm often asked how I can
oppose that deal given my consistent position in favor of more stimulus. The
answer is that yes, I believe that stimulus can have major benefits in our
current situation - but these benefits have to be weighed against the costs.
And the tax-cut deal is likely to deliver relatively small benefits in
return for very large costs.
The point is that while the deal will cost a lot - adding more to federal
debt than the original Obama stimulus - it's likely to get very little bang
for the buck. Tax cuts for the wealthy will barely be spent at all; even
middle-class tax cuts won't add much to spending. And the business tax break
will, I believe, do hardly anything to spur investment given the excess
capacity businesses already have.
The actual stimulus in the plan comes from the other measures, mainly
unemployment benefits and the payroll tax break. And these measures (a) won't
make more than a modest dent in unemployment and (b) will fade out quickly,
with the good stuff going away at the end of 2011.
The question, then, is whether a year of modestly better performance is
worth $850 billion in additional debt, plus a significantly raised
probability that those tax cuts for the rich will become permanent. And I
say no.
The Obama team obviously disagrees. As I understand it, the administration
believes that all it needs is a little more time and money, that any day now
the economic engine will catch and we'll be on the road back to prosperity.
I hope it's right, but I don't think it is.
What I expect, instead, is that we'll be having this same conversation all
over again in 2012, with unemployment still high and the economy suffering
as the good parts of the current deal go away. The White House may think it
has struck a good bargain, but I believe it's in for a rude shock.
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