Republicans’ $10 Trillion Giveaway

By Pat Garofalo, Michael Linden, Ethan Berman | August 3, 2010

Washington, D.C.- Shortly after President Obama came into office, Congress passed the American Recovery and Reinvestment Act of 2009, the $787 billion stimulus package of tax cuts and increased federal spending that bolstered the social safety net and led to critical job creation and economic growth amid rising unemployment in the face of the Great Recession. The economy at the time was on target to shed an astonishing 11 million jobs according to estimates by the nonpartisan Congressional Budget Office, but the CBO calculates that the Recovery Act saved or created about 3 million jobs since its enactment. The president’s stimulus package also provided tax cuts to more than 95 percent of American households, and kept millions of American families from falling into poverty.

Indeed, the Recovery Act and the other extraordinary steps the federal government took during the financial crisis helped avert a second Great Depression, according to a new study by Princeton Professor Alan Blinder and Mark Zandi, chief economist of Moody’s Economy.com and one of the top economic advisors to Sen. John McCain (R-AZ) during his 2008 presidential campaign.

So what do Republicans today think of this exceedingly timely rescue of the U.S. economy? They continually blast it as a failure, after all but three Republicans in Congress voted against the bill in 2009 (one of whom, Sen. Arlen Specter, later became a Democrat). And what is their alternative plan to restart the economy so that broad-based jobs growth can begin in earnest? When House Minority Whip Eric Cantor (R-VA) was asked in December to describe the Republicans’ “big idea” for creating jobs, all he could say was, “the big idea is to get, to get, to produce an environment where we can have job creation again.”

All Americans can agree on that point, of course, but Republicans have also put their plans on paper. The Economic Freedom Act of 2010—introduced by Rep. Jim Jordan (R-OH) and Rep. Jason Chaffetz (R-UT) and backed by the 116 member-strong House Republican Study Committee—makes it clear that their job-creation plan is to double down on the failed economic policy agenda of President George W. Bush. The bill calls for more deficit-funded tax cuts for the wealthy and deregulatory policies that allow corporations to do what they did under President Bush—act with almost complete disregard for consumers’ financial well-being, the environment, and worker safety.

After insulting the intelligence of the American people by presenting the same failed conservative economic policies that led to the Great Recession, they then advocate further ways to injure our economy with new budget-busting tax cuts for the wealthy and corporations. Such tax cuts led to the jobless economic recovery of 2001-2007, when jobs growth was an anemic 4.8 percent before the consequences of conservative economics over the next three years led to today’s nearly 10 percent unemployment rate.

We calculate that today’s recycled conservative economic policy prescriptions would cost about $10 trillion in new deficit spending over 10 years relative to the current Congressional Budget Office baseline, which is the CBO’s estimate of spending over 10 years figuring in no changes to current tax law and discretionary spending. This nearly $10 trillion surge in deficit spending would flow overwhelmingly to the rich and corporations, with the rest of us picking up the tab to pay the cost of borrowing these vast sums. The Economic Freedom Act alone would add about $6.9 trillion to the deficit relative to current law, while the rest comes from Republican refusal to allow any of the Bush tax cuts of 2001 and 2003 to expire.

Join a media conference call to discuss this report with House Majority Leader Steny Hoyer will join the Center for American Progress Action Fund’s Neera Tanden, Michael Linden, and Pat Garofalo and Steve Wamhoff, Legislative Director at Citizens for Tax Justice, TODAY Tuesday, August 3, 2010 at 2 p.m E.T.