Tax cuts for rich come on backs of the poor, farmers, students

Published: November 20, 2005

Before getting into the cruel details of the budget cuts passed in the dark of night by our House of Representatives, let?s take a step back and look at the big picture.

This country is in a financial crisis for three major reasons.

First, we rushed to war in Iraq, without allies, and are now largely footing the $7 billion-a-month bill on our own. The war has proven far more costly in terms of human life than the Bush administration ever anticipated, and the financial cost of our extended occupation, now estimated at $220 billion, is crushing our government beneath a mountain of debt. And there?s no end in sight.

Second, we have suffered several massive natural disasters. Hurricanes Katrina and Rita brought almost unprecedented devastation to the Gulf Coast, Florida is still reeling from Wilma and these are just the three largest of the many "acts of God" that our government must spend billions of dollars to address. The price-tag for Katrina alone is $62 billion and growing. This one catastrophe will cost more than all the proposed spending cuts combined.

Third, and unlike the hurricanes because they are completely within our control, are the tax cuts the Bush administration and the Republican-controlled Congress have recklessly implemented over the past five years.

In 2004, according to the Center on Budget and Policy priorities, these tax cuts, that indisputably provide far greater relief to the wealthy than the middle class, accounted for half the budget deficit or about $235 billion. Both the House and Senate budget reconciliation plans contain proposals to extend these cuts beyond the Bush presidency.

The irony of the cuts proposed by both the House and Senate is that they are touted as necessary for reducing our budget deficit. However, when you combine the proposed spending cuts with the proposed tax cut extensions, the deficit actually increases.

"It is hard to rally support for a spending cut labeled the ?Deficit Reduction Act of 2005? when it will be followed by a tax cut that, by the same logic, should be labeled the ?Deficit Increase Act of 2005,?" said Robert L. Bixby, executive director of the nonpartisan Concord Coalition.

This budget fight is not, as the politicians would have you believe, about reducing the deficit. It is, instead, about Republicans, in the face of a massive runup in government spending, trying to look like they have a shred of fiscal responsibility by kicking around the poor.

Here?s what the tax cuts have meant to American taxpayers, according to the Urban-Brookings Tax Policy Center:

The middle 20 percent of taxpayers saves an average of $547 thanks to three middle-class tax provisions. These are the creation of a 10 percent tax bracket, the expanded child tax credit, and the tax relief provided to married couples. All the other tax cuts combined save the average American taxpayer about $100 a year.

By contrast, the top 1 percent saves $1,320 a year from the middle-class tax cuts and all the other provisions heap on, and here?s where things become unfair, an additional $33,672.

To fund these tax cuts for the ultra-rich, Congress will cut food stamps, health care for the poor, farm aid, and $14.2 billion in financial aid to college students, to name a few of the measures approved.

For the record, both Jeb Bradley and Charlie Bass of New Hampshire voted for the cuts, while Tom Allen and Michael Michaud of Maine voted against them.

The only howl of protest from President Bush came when the Senate had the nerve to suggest that oil companies should pay more in taxes in light of the record-setting quarter they just had, which included $10 billion in profits for ExxonMobil alone. The president threatened to veto the entire spending package should that provision still be included in the House-Senate compromise bill.

The only positive thing to come out of this action on Capitol Hill was the removal, by the House, of provisions to allow oil drilling in the Alaskan National Wildlife Reserve. New Hampshire played a key role in this fight as Sen. Judd Gregg allowed the drilling to get into the budget bill through some sleight of hand in his role as Budget Committee chairman. New Hampshire Congressman Charlie Bass then led the fight to get the drilling provision removed from the House version of the bill. It is our fervent hope that the compromise bill will not contain this drilling provision.

Readers should remember that this fight is far from over. Anything can happen when budget negotiators from the House and Senate meet behind closed doors. Let?s keep fighting for our neediest neighbors and let the richest 1 percent fend for themselves.