If you read the New York Times or the Washington Post or watch NBC, ABC, CBS, CNN, or MSNBC, the chances are pretty good that you wouldn't know that there is a growing chorus of Democrats who want to extend the Bush Tax cuts; especially those for the wealthy (Click here to See Story: Divisions among Dems over tax cuts for affluent).
Senate Democrats like Evan Bayh, Kent Conrad and Ben Nelson are the real leaders on this. Actually, you have most of the fiscally conservative "Blue Dog" Democrats in the House and Senate who believe that the tax cuts should be extended.
The thing is, that all these Democrats understand that lower taxes help drive the economy. This is something that Nancy Pelosi, Harry Reid, and Barack Obama aren't willing to admit to their political base of fiscally and financially challenged voters who only see the rich as fat cats and ignore the thousands of small business owners who employ almost 70% of the workers in America, and who are taxed at the highest rates. Like it or not, the Bush Tax Cuts helped the economy after the massive plunge following 9/11. Much of the "deficit" that the left constantly complains about wasn't due to the tax cuts. It was due to all that was done after 9/11 to create new government agencies such as the TSA, and to completely rework our national security operations and harden government sites in the U.S. and around the world. And, despite the massive costs of two wars, the Bush deficits had been dwindled down to just about $185 billion in 2007; a year before the current recession hit.
The fact is that federal tax revenues grew by 37%, or from 1.7 trillion to $2.4 trillion from 2003 to 2006 (Click here to See Congressional Budget Office Report: Growth in Federal Tax Revenues From 2003 to 2006). This helped offset much of the spending that took place during this time. The Iraq and Afghanistan Wars had cost almost a trillion dollars through 2007. Yet, the total combined deficits by the Bush Administration from 2003 through 2007 was about $1.4 trillion; meaning that, if you exclude the cost of those two wars, the 5-year adjusted deficit spending was really only about $50 billion a year. Compare that to the current-year Obama budget deficit of $1.47 trillion.
Last week, Ben Bernanke argued before Congress that the Bush Tax Cuts should be left in place and not allowed to expire in January (Click here to See Story: Bernanke Says Extending Bush's Tax Cuts Would Maintain Economic Stimulus). I really think Pelosi, Reid, and Obama would be smart to heed that advice. In fact, I think this economy would be in worse shape today without them. Extending them will give businesses the reassurance that they can operate effectively without another government burden (ie. ObamaCare, Financial Regulation, Cap and Trade, Card Check, etc.) being hoisted upon them. Maybe then, corporate America will start spending the near 1-1/2 trillion dollars that is estimated to be held in reserves for fear of further government regulation and taxes.