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Tuesday, October 11, 2011

In Obama's Tax Increase Bill, Millionaires Tax Would Go To New Spending Not Reducing Deficit

By Susan Duclos

The Hill reports that Obama's tax increase plan which he named a "jobs" bill is headed for defeat in the Senate where there will be a 60-vote threshold vote on whether to take up the bill.

Not only because Republicans are united against the bill but because vulnerable Senate Democrats (those up for reelection in 2012) are simply not willing to back another $447 billion on a stimulus plan after the previous $787+ billion stimulus package failed to keep unemployment under 8 percent and it is in fact over 9 percent now and the deficit has skyrocketed with all the additional spending already.

According to The Hill article, Joseph Lieberman (I-Ct) who generally votes with Democrats on social issues, is also a no vote and his reasoning is very telling.

Lieberman opposes the bill because the 5.6 percent surtax on millionaires is being used for new spending instead of reducing the deficit, and will vote against the measure on final passage, his office said. Yet that vote is highly unlikely to occur because the bill is not expected to clear procedural hurdles.

In November of 2010 the Wall Street Journal updated a 1980's study which showed conclusively that every new dollar of new taxes led to more than one dollar of new spending by Congress.

We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.

Lieberman is not the only one worried about the additional spending in the so-called American Jobs Act either.

Senator Joe Manchin III, a Democrat from West Virginia released a statement after Obama gave his speech pitching his tax increase and spending plan which said "I have serious questions about the level of spending that President Obama proposed."

There is a whole list of statements out there by Democratic politicians against different areas of Obama's tax and spend plan.. go read.

Barack Obama has publicly tried to say that it is only Republicans blocking his so-called jobs bill but the Democrats in the Senate do not even have the votes needed to move the bill forward.

Then again, it is all moot despite all the Obama speeches and media attention because both Obama and the Senate Democrats in favor of the bill have been told in no uncertain terms that it is dead on arrival in the House of Representatives.

So, not only will it not be made into law but every Democrats that votes for it becomes even more vulnerable in the 2012 elections because their vote for higher taxes and more spending will be used against them in campaigns from challengers.

In 2012 there are 23 Democratic Senate seats on the block with only 10 Republican Senate seats.

If that is not bad enough, The Politico is now reporting that not only will the procedural vote not pass the 60 mark but there is a chance they will not even be able to get a symbolic simple majority of 51 votes.