Obama--Republican Compromise on Extending Tax Cuts

Message from a Club for Growth

On Monday, President Obama announced the compromise he reached with Republican congressional leaders, extending both the Bush tax cuts and unemployment benefits. As liberals shrieked in outrage, many conservatives assumed the deal must be pretty good.

It's not, and so far the people saying so the loudest have been the Club, and some of our PAC-endorsed superstars like Sen. Jim DeMint and Rep. Jeff Flake. Economic conservatives have been so fixated on extending the Bush tax cuts of 2001 and 2003 - a vital goal - that many have missed the underlying weaknesses of the deal cut on our behalf by Republican leaders.

1. The deal extends the marginal income tax rates, but resurrects the Death Tax from zero this year to 35 percent next year. Some people don't see this as a tax hike. We do.

2. The deal extends 99-week unemployment insurance benefits for another 13 months, at a cost of $56 billion, without offsets elsewhere in the budget. This would blow another huge hole in the deficit, just weeks after the American people demanded fiscal discipline at the polls. And it will keep the unemployment rate artificially high, leading to a protracted stall in the economy.

3. The employee-side Social Security tax cut is not only temporary, but also creates no incentive to hire, invest, and grow. This is Keynesian-style stimulus.

4. Finally, all of the tax cuts will only be extended a year or two, and history teaches we can't get permanent economic growth from temporary economic policy.

It's time Washington stopped monkeying around with temporary tax cuts and permanent spending. The pro-growth conservative Congress elected last month was sent to change Washington - that means flipping the mentality to temporary spending and permanent tax relief.

The Club's opposition to the deal has generated a lot of media interest, and I wanted to give you a chance to see what I've been up to.

Click here to see me on Cavuto:  http://www.clubforgrowth.org/perm/?postID=14577&utm_source=Club+for+Growth&utm_campaign=3d0c3426e2-10_12_09_Weekly_Email_i101209A&utm_medium=email

Click here to see me on The Kudlow Report:  http://www.clubforgrowth.org/perm/?postID=14576&utm_source=Club+for+Growth&utm_campaign=3d0c3426e2-10_12_09_Weekly_Email_i101209A&utm_medium=email

As we said Monday, the tax compromise is bad policy, bad politics, and a bad deal for the American people. We're going to fight it, and I hope you will continue to help us wage and win fights for economic growth and freedom over the next two years.  I know you won't let up. Neither will we.

Please consider making a donation today.

Thank you, again, as always.

Best regards,

Chris Chocola
President, Club for Growth
2001 L Street, NW, Ste 600
Washington, DC 20036
PH: 202-955-5500