“You never let a serious crisis go to waste,” White House Chief of Staff Rahm Emanuel said in early 2009 as Congress and the newly installed president considered how save the plummeting economy. “And what I mean by that it’s an opportunity to do things you think you could not do before.”
He knew what he was talking about.
Republicans appear set to cave on nearly every issue as they prepare to acquiesce to President Obama’s demand to make permanent what were supposedly temporary stimulus measures. Democrats, meanwhile, are shoving through a slew of spending proposals, taking advantage of the still-dismal economy.
[lz_jwplayer video=”e3MzlCSe” ads=”true”]
Under the emerging budget deal announced Tuesday night, the GOP also bailed on efforts to tighten restrictions on Syrian and Iraqi refugees, and didn’t bother to make an effort to strip funding from Planned Parenthood. While House Speaker Paul Ryan, R-Wis., painted the deal as a Republican win, Democrats touted across the board concessions from the GOP.
“While not getting everything we wanted, the speaker noted that both packages include many provisions that Republicans have long fought for,” AshLee Strong, a Ryan spokeswoman, told the Washington Post. “The speaker noted that though there are significant wins in these packages, we must not repeat this process and instead get back to regular order in 2016.”
But there were many losses as well. Among them were the “tax extenders” in the $1.6 billion budget deal that Congress will send to Obama this week. The plan will likely make permanent a set of “temporary” tax cuts that were instituted in 2009 to stimulate the economy after it had collapsed the year before. These include expansions of the Earned Income Tax Credit, which gives tax relief to low-income workers, the Child Tax Credit and a credit for college tuition payments.
Even some Democrats — not known for their budgetary responsibility — are opposing them on fiscal grounds.
These credits were sold back then as emergency measures to assist families and workers in need of financial relief and were scheduled to expire in 2018. The tax extenders will cost taxpayers about $500 billion over 10 years. Even some Democrats — not known for their budgetary responsibility — are opposing them on fiscal grounds.
“It would undermine the deficit creating a larger debt,” said Rep. Steny Hoyer of Maryland, one of the top Democrats in the House.
The giveaways may sound less onerous because they are called tax “credits,” but they count against the budget just like any other form government spending.
“These polices are largely spending, since they expand what taxpayers can receive back above what they pay in taxes,” Curtis Dubay, a tax reform expert at the Heritage Foundation, wrote in a blog post.
Tom Pyle, president of the American Energy Alliance, characterized the package as a massive wealth transfer to politically connected industry.
“This tax extenders deal is another example of the worst of Washington politics. Extending the wind PTC sends billions of tax dollars to large corporations like GE while advancing the Obama administration’s climate agenda and fulfilling the president’s promise to make electricity prices skyrocket.”
In return, Democrats are giving Republicans a pile of Christmas presents for them to put under the tree, mostly tagged for the Chamber of Commerce. The budget package is expected to include tax relief for some 50 special interest groups with sufficient lobbyists and political clout to extract favors from Republicans in Congress.
Republicans also agreed to concessions for wind and solar energy companies and Obama’s Green Climate Fund, all favorites of liberals.
Republicans also appear to have agreed to massive concessions for wind and solar energy companies and $3 billion for Obama’s Green Climate Fund, all favorites of liberals, in exchange for a lifting of the nearly half-century U.S. ban on crude oil exports. The research and development tax credit would be made permanent, and a credit allowing companies to more quickly depreciate assets will be extended for five years.
The plan is set to postpone both a 40 percent “Cadillac” tax on high-cost health insurance plans, which is reviled by labor unions, and a 2.3 percent excise tax on medical devices. These taxes that were part of the original plan to pay for Obamacare, meaning that this portion of funding the massive government intrusion into the health care industry will be the next president’s problem.