I do worry that Democrats in Congress relish nothing more than to shiv the incoming Democratic President, and that will stunt progress as each massive ego tries to get the most they can out of every bill. However, I don't want a situation where the Congress eagerly reads off the talking points of their party's President and enacts whatever he wants. The separation of powers is crucial to democracy. And when the Congress is weighing in on behalf of getting rid of those badly conceived tax cuts in the proposed stimulus package, I'm not going to argue at all.
Both Democrats and Republicans have questioned a provision that would provide a $3,000 tax credit to companies for every job created and, possibly, for every job spared. They contend that the idea would be ripe for abuse and difficult to administer.
Lawmakers are also skeptical about a measure that would allow companies to deduct large portions of recent losses. The proposal would benefit companies that have been hit hardest by the recession, including in the banking and real estate sectors, but experts worry that costs could soar because so many would be eligible [...]
"It is tough to see how a company that is seeing its sales slaughtered in today's recession is going to hire just because it gets a few thousand dollars per new worker from the government," Howard Gleckman wrote on the TaxVox blog for the Tax Policy Center, a nonpartisan think tank. "Profitable firms would merely take the credit for bringing on workers they were already planning on hiring."
Mark Zandi, chief economist and co-founder of Moody's Economy.com, said the credit "sounds good" but added, "It's going to be hard to design something" that proves effective and resistant to abuse.
This AP story has both Kent Conrad and John Kerry weighing in on how unwise it would be to include corporate giveaways in the stimulus.
They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.
"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.
"That to me is just misdirected," Conrad said.
Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."
I'm happy to see a "Democrats in disarray" meme on this count. It provokes real debate about the efficacy of corporate tax cuts to meet the current challenge. That's a debate we should be having, one that Democrats in the past have shied away from. I'm glad they're challenging the President-elect on this.
And I'm glad Nancy Pelosi is speaking out about the incredible disappearing repeal of the Bush tax cuts.
Speaker Nancy Pelosi told reporters Thursday that she wants to see the Bush-era tax cuts for the wealthy repealed "as early as possible."
The call for repeal may place Pelosi at odds with President-elect Obama; during the campaign he called for repeal but his aides have since indicated that due to the deteriorating economy, he was leaning towards allowing them to expire.
Asked again after her press conference about the tax cuts, the Speaker said she is "urging repeal."
Good. There is no need to placate Republicans by continuing to allow the very rich to suck the Treasury dry, especially at a time of trillion dollar deficits. There's an urgent need for shared sacrifice and to push Obama to follow through on this campaign promise. That's opposition I can believe in.