“Trillion Dollar Fraudsters”: We’re Looking At An Enormous, Destructive Republican Con Job, And You Should Be Very, Very Angry


By now it’s a Republican Party tradition: Every year the party produces a budget that allegedly slashes deficits, but which turns out to contain a trillion-dollar “magic asterisk” — a line that promises huge spending cuts and/or revenue increases, but without explaining where the money is supposed to come from.

But the just-released budgets from the House and Senate majorities break new ground. Each contains not one but two trillion-dollar magic asterisks: one on spending, one on revenue. And that’s actually an understatement. If either budget were to become law, it would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.

You might be tempted to shrug this off, since these budgets will not, in fact, become law. Or you might say that this is what all politicians do. But it isn’t. The modern G.O.P.’s raw fiscal dishonesty…

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Divergent Visions: GOP Budget Plans Don’t Line Up With US Priorities

New analysis examines how competing federal budget proposals rate in responding to the stated policy priorities of the American people

by Deirdre Fulton, staff writer

The competing federal budget proposals will now wind their way through a fractured Congress. (Photo: Stephen Melkisethian/flickr/cc)

The differences between the four budget proposals recently put forth by President Barack Obama, both Republican-majority houses of the U.S. Congress, and the Congressional Progressive Caucus are “stark,” according to a new analysis—while some provisions in the GOP blueprints “completely miss the mark in responding to what Americans say they want.”

The National Priorities Project (NPP), a non-profit, non-partisan research organization dedicated to making the federal budget process transparent, released Competing Visions on Friday.

The report compares how each budget proposal responds (or not) to the stated policy priorities of the American people, on key issues including jobs, education, Social Security, Medicare and Medicaid, food assistance, and military spending, as well as proposed strategies for tax reform and deficit reduction.

“Our analysis shows that, in most spending categories, the Congressional Progressive Caucus and the president would do the most to address the priorities voiced by the majority of Americans,” said Jasmine Tucker, research analyst for NPP and author of the report. “In some areas, the House and Senate budget proposals completely miss the mark in responding to what Americans say they want.”

For example, on the issue of taxing the wealthy, according to the NPP analysis:

  • 68 percent of Americans think wealthy households don’t pay enough in taxes.
  • The Obama budget proposal raises top capital gains tax rate to 28 percent and closes the “trust fund loophole” that allows heirs to avoid taxation, raising $208 billion over 10 years. Places limits on tax deductions for top income earners and implements the Buffett Rule ensuring a minimum tax rate for the wealthy. Places limits on tax deductions for top income earners and ends the “carried interest” loophole that benefits hedge fund managers to raise $17.6 billion over 10 years.
  • The House budget calls for comprehensive tax reform that would lower tax rates for individuals and families. Closes some special interest tax loopholes but does not specify which ones. Eliminates the Alternative Minimum Tax that sets a minimum tax for the wealthy.
  • The Senate budget contains no proposed changes to the status quo.
  • The CPC proposal raises tax rates for richest 2 percent (earning more than $250,000 per year) to Clinton-era levels, and taxes capital gains investment earnings at higher rates, yielding $1.4 trillion in additional revenue over 10 years. Places a cap on the value of itemized deductions that mostly benefit the wealthy (raising $566 billion over 10 years) and limits other tax deductions for top income earners.

Similar discrepancies exist on almost every issue.

As Tucker put it: “The differences between the four budget proposals are stark, and all signs indicate a difficult budget battle ahead as lawmakers try to resolve widely different approaches despite clear public opinion in favor of certain policies.”

While 70 percent of Americans oppose cuts to food stamps, the House and Senate budget plans would both cut the program.

While 67 percent say improving the education system in the U.S. should be a top priority for the president and Congress this year, the House and Senate allocate no new funding for education—and in fact the House proposal “freezes the maximum Pell grant award at the same level for the next 10 years, provides financial aid to fewer families, and makes substantial cuts to domestic discretionary spending, including education.”

Overall, the House Republican budget would cut $5 trillion in government spending over the next decade, mostly out of programs that low- and moderate-income Americans need and depend on—and say they support. At the same time, it adds $400 million in defense spending—not in line with public opinion polls—and promises to lower tax rates for wealthy Americans and corporations.

The Senate version follows the same basic outlines.

At a Senate Budget Committee hearing on Wednesday, U.S. Sen. Bernie Sanders (I-Vt.) also noted the divergence between GOP policies and the priorities of the general public.

“[T]he rich get much richer, and the Republicans think they need more help,” he said. “The middle class and working families of this country become poorer, and the Republicans think we need to cut programs they desperately need. Frankly, those may be the priorities of some of my Republican colleagues in this room, but I do not believe that these are the priorities of the American people.”

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Amodei Believes in the GOP Tax-Cut Fairy

Rep. Patrick Tiberi [R-OH12], on Oct 6, 2011, proposed HR 3123, the American Job Creation and Investment Act of 2011.  The title may imply the bill will have some meaningful efforts to promote job creation, but when you read the bill’s description, you’ll quickly learn it has nothing to do with job creation and everything to do with allowing “bonus earners” at the top of the food chain to avoid paying AMT on those exorbitant bonuses.

The Alternative Minimum Tax (AMT) was designed to keep wealthy taxpayers from using loopholes to avoid paying taxes. But because it’s not automatically updated for inflation, more middle-class taxpayers are getting hit with the AMT.  This bill, should it be enacted, will only exacerbate the disparity in taxable income, giving the Wall Street bonus earners yet another tax advantage under the guise of “job creation.”

According to THOMAS, HR3123, the American Job Creation and Investment Act of 2011, would amend the IRS code, with respect to the election to accelerate the alternative minimum tax (AMT) credit in lieu of bonus depreciation, to: (1) repeal the $30 million cap on the AMT tax credit and increase the rate of such credit from 6% to 50%, (2) allow investments made by partnerships that are more than 50% owned by a corporation to qualify for such increased AMT credit amount, and (3) allow taxpayers to make separate elections for each taxable year to take bonus depreciation or AMT credits in lieu of bonus depreciation.

I oppose such a change in the IRS code and as such, I used POPVOX to send an email to Rep. Amodei expressing that opposition on 12/8/2011:

“I oppose the passage of H.R. 3123, titled as the “American Job Creation and Investment Act of 2011.”  The writer of this bill was apparently tapped by the GOP tax fairy’s wand and is under the delusion that tax cuts (in the form of elimination AMT revenue) are free, and that merely by decreasing taxes, multitudes of jobs are created.  That’s simply NOT the case! Additional job opportunities are created when demand for products/services increases beyond the capabilities of the employer’s given workforce. The only thing this bill will do is deprive the Treasury of needed revenue. Little, if anything, will take place with respect to job creation, since nothing in this bill is designed to create additional demand for products and/or services.”

Today, I got his reply to my email:

HR 3123 is an affront to tax fairness and opens a window into the GOP’s desire to “take our country back” … apparently to before 1969.  You see, it was in 1969 that Congress noticed that 155 people with high incomes were legally using so many deductions and other tax breaks that they were paying absolutely nothing in federal income taxes. Their nonexistent tax bills were an embarrassment.  So … Congress instituted the AMT with the aim of making the tax system fairer.

But because the AMT was never indexed to inflation—as the regular income tax is—each year, more and more middle-income taxpayers are snared by a tax originally targeted at the rich.  Each year, instead of indexing the AMT, Congress merely applies a “patch” in an attempt to slow down the expansion of the AMT to taxpayers to whom it was never intended to apply.

The patch HR 3123 would hope to apply would trounce all over the fairness in taxation principle that the AMT was originally designed to assure.