S+P wanted $4T in deficit reduction over 10 years. Allowing Bush tax cuts to expire would save $5.4T

[deminks]

http://www.ctj.org/taxjusticedigest/archive/2011/06/new_from_ctj_another_decade_of.php

CTJ and others have noted that the cost of the Bush tax cuts from 2001 through 2010 was about two and a half trillion dollars. The recent “compromise” that extended them for another two years, through the end of 2012, cost $571.5 billion. But this is only the beginning. If Congress makes permanent the Bush tax cuts or extends them for another decade, the cost will be $5.4 trillion.

retweeted from Think Progress

https://twitter.com/#!/thinkprogress

[TheWraith]

1. The debt deal passed already assumes the expiration of the Bush tax cuts.

S&P wanted $4 trillion on top of that.

[indurancevile]

4. where? s&p specifically mentioned their doubt that the cuts would be rescinded in their

announcement.

[TheWraith]

6. The ten year budget projections assume the expiration of the Bush tax cuts.

In other words, to further extend those tax cuts--assuming that it would make it past the Senate and White House, which they wouldn't--the House Republicans would have to find equivalent budget cuts under the terms of the debt agreement.

[indurancevile]

7. no.

S&P statement: "Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act."

http://www.businessinsider.com/sp-does-not-believe-the-bush-tax-cuts-will-get-lifted-in-2012-2011-8

[TheWraith]

9. Then S&P is fucking up their analysis. Or else they have no idea how government works.

No act of Congress is required for the tax cuts to expire.

[indurancevile]

10. no act of congress was required the last time either. congress chose to extend them. that's what

they're saying.

[Selatius]

11. They probably believe Republicans will hold another social program hostage to extend the cuts.

It worked last time when unemployment benefits were about to expire without an extension. Republicans would not approve of the measure to extend benefits unless Democrats agreed to extend the Bush tax cuts and impose a payroll tax holiday on Social Security.

[indurancevile]

12. no, s&p want cuts in social programs too. in fact, that's the primary focus in their announcement.

[BlueCaliDem]

5. That's what I thought, too.

Where else can we find more cuts to reach the $4T S&P wanted? Aiming for our social programs, no doubt, because they wouldn't THINK of touching defense spending.

[patrice]

2. Not at least attempting a strong stand against the BTC extension last Fall was a HUGE mistake. nt

[patrice]

3. The Yahoo article on this does seem to say that sunsetting BTCs WOULD count as part of the necessary

deficit reduction:

http://finance.yahoo.com/blogs/daniel-gross/u-credit-rating-victim-gop-sabotage-021622372.html

The irony, of course, is that the very attribute that pushed S&P to downgrade -- the inability of the U.S. political system to agree on large topics -- may help improve the fiscal situation. At the end of 2012, the Bush tax cuts are slated to expire. If the two parties fail to agree on some very controversial issues in the midst of an election year, taxes will rise across the board, on income and on investments, producing trillions of dollars in revenues over the coming decade.

[JVS]

8. Hopefully Obama can use this for leverage when pressure is put on him to renew the tax cuts.