Deal To Avert Government Shutdown Saves $38 Billion ? Bush Tax Cut Deal Spent $150 Billion
Posted in Main Blog (All Posts) on April 10th, 2011 4:36 am by HL
Deal To Avert Government Shutdown Saves $38 Billion ? Bush Tax Cut Deal Spent $150 Billion
Late last night, just minutes from an impending government shutdown, congressional negotiators and President Obama reached a deal to fund the government for the rest of the fiscal year, cutting $38.5 billion under current funding levels, per Republican demands. House Speaker John Boehner (R-OH) and other Republicans hailed the deal as an important step to reining in the deficit. In a speech addressing the deal, Obama compared the compromise to the one he helped broker late last year on extending the Bush tax cuts for two years.
But a look at those two deals suggests Republicans are not as interested in cutting the deficit as they claim. In both cases, Democrats made big concessions on key Republican agenda items — tax and spending cuts — in the face of intransigent opposition from the GOP. But while the appropriations deal from last night cuts $38.5 billion in spending over the next six months (through the end of the fiscal year in September), the tax cut deal deprives the government of roughly $150 billion in revenue over a similar period of time.
Extending the Bush tax cuts “would result in a $200 billion to $300 billion cost to the US Treasury compared to what had been expected” in one year — or $100 to $150 billion in six months. So while they very nearly shut down the government to extract painful spending cuts, Republicans had already wiped out those spending cuts many times over with the revenue lost from extending the Bush tax cuts.
GOP Rep. Posey Mocks Critics Of Big Oil: ?Quit Trying To Play Pin The Tail On The Donkey!?
Last month, the entire House Republican caucus voted to defend corporate welfare for Big Oil, stopping any attempt to remove billions of dollars of subsidies for the industry. Many of these companies exploit the tax code to pay very little in taxes, with companies like Exxon Mobil paying absolutely nothing in federal corporate income taxes in 2009.
On Thursday, Rep. Bill Posey (R-FL) took to the floor of the House of Representatives to mock those who are outraged about the protection of subsidies for Big Oil, while services for Main Street Americans are slashed. He jokingly called them the “evil oil companies” and said that “corporations don’t pay taxes. Corporations collect taxes.” He instructed critics of Big Oil to “quit trying to play pin the tail on the donkey,” suggesting that they were unfairly targeting the industry:
POSEY: Those evil oil companies, the answer to all our problems is to tax them more. As if the members of this body and the public is stupid enough to think that at the end of the year those big oil companies are just going to write a check for another zillion dollars. Let’s say we tax those evil oil companies another dollar a gallon. They’re not going to write the check, we know what’s going to happen, they’re going to raise the price a dollar a gallon. Or given the corporate greed we sometimes see round it off to two dollars. Corporations don’t pay taxes. Corporations collect taxes. They collect taxes from consumers who ultimately pay the tax. You add a tax to a product and a consumer’s going to pay more. It doesn’t pass the straight face test. I wish we would quit, as the gentleman from the Texas said, quit trying to play pint he tail on the donkey. We know corporations don’t pay taxes. Consumers pay taxes, corporations just collect it.
Watch it:
Exxon Mobil likely appreciates Posey’s defense of their industry. He received $2,000 from their federal PAC during the 2009-2010 election cycle. And his economic argument doesn’t pan out. A Joint Economic Committee report found that “the removal or modification of [one of these subsidies] is unlikely to have any effect on consumer prices for oil and gas.” For the record, 74 percent of Americans favor ending Big Oil subsidies — people that Posey calls “stupid.”
