I voted against extending tax cuts to millionaires and billionaires because I believed it was fiscally irresponsible and would unnecessarily add to our nation's huge debt.This is the Democratic position that even President Obama ran on, and pretty standard for Democrats.
However, this reasoning rarely mentions the fact that extending the Bush taxcuts for the middle-class - which Senator Udall voted for - would also increase the national debt that he claims to be so concerned about. The non-partisan Congressional Budget Office (CBO) says that extending the Bush taxcuts for the middle class and a permanent fix to the AMT will cost $3 trillion over 10 years - and extending the taxcuts for those making over $250,000/year will add $700 billion to that over the next decade.
If Senator Udall and other Democrats really want to claim the mantle of fiscal responsibility, here is what I would like to hear them say:
"By extending the middle-class taxcuts and fixing the AMT for two years, we will add $463 billion to the deficit. But that is necessary, because we are in a recession, and we want to get as much money into the hands of the American people as we can, so that they can spend the money, increase demand, grow the economy, and lead us out of the recession.
We need the payroll taxcuts to provide an additional stimulus to working Americans. But because we need to ensure the future of Social Security, we will pay for this temporary reduction in payroll taxes by, yes, further borrowing. Again, this is temporary for two years, with the objective of increasing consumer demand to grow us out of this recession.
We also need to extend unemployment benefits for Americans who are out of a job through no fault of their own, and are actively looking for work, so that they are not left without food or a roof over their heads (and it will come back into the economy as they spend the money). And this cause is worth borrowing $56 billion for.
The wealthiest Americans do not need the extra Bush taxcuts, as even Warren Buffet admits. In particular, wealthy Americans who are concerned about the debt should be happy to let the rates go back to that under the Clinton era, so that we do not add to the national debt."
I am sure Senator Udall's speech-writers can do a better job, but I would like him to be honest about the real costs.
Finally - my own reasoning for supporting this tax cut deal, over and above the additional, second stimulus - is the chance at passing the DREAM Act, repeal of Don't Ask/Don't Tell, and ratification of new START, as moderate Republicans like Susan Collins, Scott Brown, and Olympia Snowe have imposed the condition of extension of the Bush tax cuts as a precursor to these three important pieces of legislation. Next year, Republicans will control the House, and they will likely pass such a taxcut deal (or worse, from the Democrats' point of view), that the President will be hard-pressed to veto (as any stimulus will help the economy.) But we will have fewer votes in the Senate and far fewer in the House to pass those three important pieces of legislation, effectively dooming at least DADT repeal and DREAM. If giving the richest Americans $150 billion (Bush tax cuts + estate tax) helps us achieve passage of these three critical items, it will be well worth it.