President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs.
Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.
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."
The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.
One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.
Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.
Democrats on Capitol Hill can't see the forest for the trees. This exhibits the fundamental differences in ideologies. It's not their money to spend. It's your money! Giving you the choice to spend it on credit card bills, mortgages, utilities, clothes, private school, crack, whatever, is the point of a tax cut. How is building infrastructure i.e. bridges, road repair, etc. going to stimulate the economy? Creating a job in an economy where no goods are exchanged doesn't help anyone. This is the beginning of the war against the individual. Since FDR's new deal, and perhaps before, the Government has been confident they can spend your money through tax revenue more effectively and effeciently than you can. Anyone with a brain should be insulted. The fact remains until the housing and mortgage crisis can be ameliorated, most efforts are futile. Aside from a 2 or 3 month tax break, where no income (state or federal) is withheld, no FICA, no nothing, this is the best option to get this economy boosted. Money needs to be exchanged for goods and services or more people will be losing jobs. Job creation in a shrinking economy is like leaving your inherited diamonds to Winona Ryder for safe keeping. Kiss them and your new job goodbye.
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