Senate Democrats Criticize Obama's Proposed Tax Cuts

[DeepModem Mom]

Source: AP

President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs. Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.

They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers. "If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee. "That to me is just misdirected," Conrad said.

Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."

The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.

One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week. Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits....

Read more: http://hosted.ap.org/dynamic/stories/O/OBAMA_TAXES?SITE=COBOU&SECTION=HOME&TEMPLATE=DEFAULT

[Mojambo]

1. Good for them. Especially Kent Conrad for pointing out the supply side garbage.

Come on Obama. Throw out the discredited economic policies of Reagan.

[brentspeak]

6. That will hard, because Obama has surrounded himself with Milton Friedman-lite types

Goolsbee, Furman, Summers -- all "kinder and gentler" free-marketeers.

:banghead:

[Mojambo]

7. I know. It's discouraging as hell. n/t

[bluestateguy]

2. They are misguided about the tax cut for workers

I won't speak to the business tax cuts, but the income tax cuts for people must stay in the plan. They are not the same as the failed rebates of 2008 and 2001. The rebates were used to pay bills or to save because people knew that they were a one hit wonder, a one time thing. But a long-term change to tax rates can cause people to change their spending habits, as they know that their take home pay will be higher not just once, but for the foreseeable future.

Ron Wyden is an idiot who supported Bush's bizarre health care plan in 2007, BTW.

[rpannier]

3. Good call by many senior Democrats

Sen Conrad is totally correct

[Stuckinthebush]

4. OK, American citizens...

This is how the executive and legislative branches are supposed to operate! The legislative branch is not simply a rubber stamp for the executive branch.

I love it.

[Number23]

5. Hadn't thought about it that way... but you know what?

This is how the executive and legislative branches are supposed to operate!

You're right! :)

[Political Heretic]

8. Uh yeah, as near as I can tell I'm fully with Kent Conrad on this one.

Though I would love it if we could all just be 100% united, based on what I understand so far I feel that Senate Democrats concerns are extremely valid and that passage of the President's plan as-is would be insufficient and possibly ineffective.

[No Elephants]

9. Obama is supply side; Congress has been corrupted by lobbies; we're so screwn.