Americans need to pinch pennies these days. Budget deficit and all that. For months that has been the word from Republicans and conservative Democrats, who have rejected every suggestion that more be done to avoid deep cuts in public services and help the ailing economy.
But these same politicians are eager to facilitate a bonus averaging $3 million each to the richest 120,000 people in the country. Paul Krugman, in The New York Times, puts it in context:
Back in 2001, when the first set of Bush tax cuts was rammed through Congress, the legislation was written with a peculiar provision — namely, that the whole thing would expire, with tax rates reverting to 2000 levels, on the last day of 2010.
Why the cutoff date, he asks? Well, in part, it was used to disguise the fiscal irresponsibility of the tax cuts: lopping off that last year reduced the headline cost of the cuts, because such costs are normally calculated over a 10-year period. It also allowed the Bush administration to pass the tax cuts using reconciliation — yes, the same procedure that Republicans denounced when it was used to enact health reform — while sidestepping rules designed to prevent the use of that procedure to increase long-run budget deficits.
Obviously, the idea was to go back at a later date and make those tax cuts permanent. But things didn’t go according to plan. And now the witching hour is upon the US.
Krugman rightly suggests this has nothing to do with sound economic policy. Instead, it’s about a dysfunctional and corrupt political culture, in which Congress won’t take action to revive the economy, pleads poverty when it comes to protecting the jobs of schoolteachers and firefighters, but declares cost no object when it comes to sparing the already wealthy even the slightest financial inconvenience.
Read the damning assessment, and plea for the Obama Administration to stand firm, in The New York Times …
