On the Spot (CNSNews.com) - Republican congressional leaders are insisting that talks on extending President Bush's 2001 and 2003 tax cuts be included in deliberations on an economic stimulus package.
The Bush tax cuts are now set to expire in 2010. The combined cuts were projected to save taxpayers $1.7 trillion over ten years.
Congressional leaders say a tax stimulus package is hastily being constructed in response to a report released Tuesday by the nonpartisan Congressional Budget Office, which showed an economy moving towards recession.
Despite a general consensus on Capitol Hill that some sort of economic stimulus is now needed, many Democrats still are not willing to extend the Bush tax cuts.
Financial Services Chairman Barney Frank (D-Mass.) told The New York Times earlier this week that Republicans are acting opportunistically. "There is nothing countercyclical about extending tax cuts," said Frank. "That's simply trying to use the bad economy as a platform for their ideological goals."
House Speaker Nancy Pelosi (D-Calif.) said Wednesday, "We have hesitated to say we are in a recession because we don't want to contribute to a lack of confidence. However, every indicator shows we need an economic stimulus package. We need to restore confidence in the American consumer and in our markets."
Cybercast News Service asked House Republicans if they were willing to set aside negotiations to extend the Bush tax cuts to produce a package that focuses on immediate economic stimulus. Republican leaders agreed extension of the Bush tax cuts would be a priority for 2008 and an important part of their stimulus strategy.
House Minority Leader John Boehner (R-Ohio) told Cybercast News Service that he and his fellow Republicans are adamant about preventing the Bush tax cuts from expiring.
"No single mom struggling to pay for her child's tuition or small business owner striving to provide good-paying jobs should have to wake up on Jan. 1, 2010 to a massive tax hike," he said. "But that must be just what congressional Democrats want, because they propose allowing the 2001 and 2003 tax cuts to expire."
But when Boehner was asked in a joint press conference with Pelosi on Tuesday afternoon if he was willing to put aside the Bush-tax-cut extension at this time, he replied, "We are going to combine our efforts and find common ground."
Senate Minority Leader Mitch McConnell told Cybercast News Service he believes preventing tax increases will be an important part of any stimulus package. "One of the most important components of an economic stimulus package is that the proposal not raise taxes," he said. "In the days ahead, we will continue to discuss options to keep our economy strong."
House Republican Conference Chairman Adam Putnam told Cybercast News Service yesterday that he views the extension of the Bush tax cuts as an important part of the economic stimulus package. "Extension of the '01 and '03 reforms is stimulative because the market place is overwhelmed by uncertainty," Putnam said. "The certainty that underlying rates will remain the same for the foreseeable future reassures investors and stabilizes markets. It has a stimulative effect."
Putnam said that extending the Bush tax cuts certainly will be on his agenda. "Given the opportunity, this would be close to the top of my agenda if we [Republicans] were driving the agenda day in and day out."
House Minority Whip Roy Blunt said the weakening economy is related to the possibility that the Bush tax cuts will expire. "Signals clearly sent that we will revert back to previous tax policies have impacted the economy today," he said. "It would help if we could extend or make these provisions permanent."
Blunt, however, was not optimistic that this could happen in this Democrat-controlled Congress. "I think they should be on the table and I think we should discuss them," he said, "though it does seem unlikely that Democrats are willing to make these provisions permanent or extend them."
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