There seems to be a lot of happy talk surrounding Barack Obama's recent trip to Capitol Hill, and his attempt to sell his stimulus bill to Republicans by adding a few 'tax cuts.' But bipartisan bonhomie notwithstanding, there's no more reason to embrace Barack Obama's stimulus plan today than there was a week ago.
It is still a tremendous waste of taxpayer dollars, will do nothing to help the economy, and will blow an even bigger hole in a deficit that has risen from $162 billion to $1.2 trillion annually since Democrats took control of Congress. What Obama is selling and what he's offering are two different things. While the economy needs a genuine stimulus, Obama is offering to 'spread the wealth.' And in so doing, he's brazenly disregarding his read-my-lips campaign pledge to offer a net spending cut at a time when everyone else is tightening their belts.
Under the proposal, as presently described, successful businesses would get no tax cuts. Unsuccessful businesses would get taxpayer subsidies. The government would be all in with respect to picking winners and losers in what used to be the free market. Likewise, Obama's "tax cuts" are actually an end run around welfare reform -- giving the most money to people who pay little or no taxes, then taking that money away if they get a pay raise or a better job. Nothing proposed by Obama -- not the infrastructure spending, not the aid to the states, and not the redistributive tax cuts -- would help create jobs or wealth. In fact, taxing the people of each state to give money back to their own state government isn't just robbing Peter to pay Paul, it's robbing Peter to pay Peter. If states need to raise more revenue, let their governors make that case directly to their taxpayers.
The best plan we are aware of to create jobs and wealth starts with making the 2001 and 2003 tax cuts permanent. These reductions in capital gains taxes and dividend taxes, as well as the elimination of the death tax, are far more likely to get the economy moving again than anything proposed by Barack Obama or his Congressional allies. Absent that, there is no reason for Congressional Republicans to lend support in the crafting of an ineffective and wasteful pork barrel bill.
If the Democrats will not make the 2001 and 2003 tax cuts permanent, the GOP should not even hint at supporting the Democrats' plan. Two Republican Senators, Mitch McConnell of Kentucky and Saxby Chambliss of Georgia, are already suggesting they can work with Barack Obama on his "tax cuts" as presented. Just callling something a tax cut does not make it so, just as calling something a stimulus does not make it so.
Mitch McConnell, Saxby Chambliss, and the rest of the Republican caucus could probably use some encouragement to avoid the siren song of tax cuts and stimulus before they lend their support to a bill that is neither.