Where are the jobs? (Rep. Paul Tonko)

With inspirational titles promising economic growth and job creation, the 2001 and 2003 tax cut packages were a bill of goods, sold to us on the premise that our nation’s highest earners should get a bigger tax cut than the rest of us because they create more jobs. But, even before the financial meltdown of 2008, these measures failed, at a cost of trillions to the taxpayer.

From 2001 to 2007, the period immediately following the tax cuts and preceding our current recession, the economy grew at a paltry pace of 2.39 percent per year. This was the slowest period of growth since World War II. Slower, by a significant margin, than the growth rate of 3.21 percent in the 1970s, when two massive energy crises, a stock market crash, and record unemployment brought our economy to its knees.

The Bush tax cuts failed to bring the growth they promised. Our jobless recession continued for more than a year after the first round of cuts, and our eventual – and short-lived – rebound was no more significant than it would have been without the cuts. By comparison, our strong economic recovery overseen by President Clinton after the dip in the early 1990s happened quicker and on a much greater scale without giving a kickback to millionaires and billionaires.
 
I went back and read the Congressional Record from that first 2001 debate, which was about balancing the budget, growing the economy, and bolstering the middle class. Unfortunately, we are still striving for these noble goals today because our predecessors failed to deliver.

President Bush started his Administration with a $128 billion surplus and a $3.4 trillion debt. He left the White House with a deficit more than ten times that ($1.3 trillion) and a debt that had more than doubled ($8 trillion).

As for the middle class, 66 percent of all growth between 2001 and 2007 went to the top one percent of Americans. According to Republicans, this massive relief to our highest earners should have trickled down to the rest of us through small business growth and job creation. The Bush tax cuts have been in place for a decade, and in that time, the rate of jobs created by start-up businesses fell.

Despite the financial crisis, the number of millionaires in the U.S. rose by 16 percent, reaching 7.8 million in 2009. Meanwhile, more than 40 million Americans are on food stamps. Approximately 21 percent of children live below the poverty line. And the top 10 percent of Americans now earn around 50 percent of our national income. Americans are falling out of the middle class, not into it. And they deserve relief. I absolute support extending the Bush tax cuts for those who work the hardest and invest the most in our economy – the real drivers of American growth, the middle class.

Let’s restore sanity and fairness to the tax cut conversation. We simply cannot afford to hand over the bank vault to our nation’s millionaires and billionaires while the middle class picks up spare change.

As in 2001 and 2003, we will soon have a Republican Speaker of the House. As an engineer, I believe that the problems we face today have solutions, and I am committed to working with any leader who presents a reasonable way forward. But the rhetoric I’m hearing from the other side of the aisle doesn’t match the math.

For example, while the middle class tax relief offers a person earning $50,000 per year a tax cut of about $1,000, Bush’s tax plan for the wealthy gives a person earning $1,000,000 a yearly tax cut of over $100,000. That means a millionaire will see a cut that amounts to 10 percent of his salary while a middle class worker will see relief that amounts to just 2 percent.  The middle class is unquestionably the driving force of the American economy and the American spirit. Giving our wealthiest citizens – who amount to about 2 percent of the American population in both Republican AND Democratic districts – a dramatically higher tax cut than the rest of us is unfair, un-American and disingenuous to a priority concern of the American public, our national debt.

Taking a look at three influential Republican leaders and incomes in their home districts, a different story emerges. On average, only 1.7 percent of their constituents make over $200,000 per year – the minimum annual earnings to qualify for the special high-income tax cut package Republicans support. These leaders, like every other Member of Congress, swore an oath to “faithfully discharge the duties of the office” to which they were elected – to fairly represent their constituents in Washington. Not the few thousand who make more than $200,000 per year, but the entire 340,000 filers in their districts, who demand fairness in our tax code.
 
If there was one message I heard loud and clear this November it was that we simply cannot afford to continue business as usual in Washington, D.C. We must take a serious look at our debt and how we are spending public dollars and collecting taxes. Our middle class has been ignored for far too long in this country, and tax cuts are just one piece of the puzzle. 

We can and will rise together, with careful planning and smart policy. In the debate over extending tax cuts, the choice is clear: I stand with the 98.1 percent of my district in the middle class. I hope my colleagues will review their own district numbers and do the same. After all, a thoughtful government deserves nothing less.