TARP II (Tax Assistance for Rich People) Passes
The 858 Billion dollar bill that extends all of the Bush tax cuts by ballooning the deficit has just passed the House, and will now go to Obama who will sign it.
This bill has caused a full blown rebellion from progressives who were so instrumental in the election of Obama in 2008. The measure survived an epic 8.5 hour traditional style filibuster by Sen. Bernie Sanders (I-VT), the longest stand up filibuster in 27 years. It also withstood a procedural move by progressive Democrats in the US House.
TPM reports “a bloc of angry progressives scuttled that plan. In a move that surprised aides and members, they temporarily derailed a key procedural measure required to pass the bill.”
The cost of the bill had originally been $990 billion, but that was trimmed somewhat to $858 billion before the bill passed in the US Senate. Even at this size, it is significantly larger than the Stimulus bill over 10 years, and provides even more lucrative tax cuts for the rich than was even present in the original Republican plan. Perhaps the reason for the unpopularity of the ARRA is due to the fact that only 40% of it was tax cuts or these were not meant for the rich, as there has been a mysterious lack of Tea Party protests over the larger deficit ballooning bill passed today.
According to Reuters, “Experts predict that the measures will probably boost economic growth but add to the $1.3 trillion budget deficit, which has unsettled the bond market.”
This Clintonian Backflip by President Obama will likely cost him his most vocal supporters, as well as the 2012 election. A more palatable approach floated in the waning days to let all of the tax cuts expire and draft a bill containing an Anchor Clause that would retroactively refund the restored tax rates for lower and middle income workers was ignored.
The top tax rate for the richest Americans will remain at 34.5%, which is 27% below the historical average rates which have been as high as 92% in the past. While the overall “compromise” enjoyed a plurality of popularity, polls had consistently demonstrated that Americans did not favor extending tax cuts for wealthy Americans.
Rep. Peter Welch (D-VT) stated, “This legislation creates too few jobs and too much debt.”
Some of the least popular elements of the bill include the fact that while it extends tax cuts for those who can most afford to pay, it actually increases the tax burden for the less fortunate, and will lead to an even sharper gulf between the rich and poor. The process of wealth consolidation has been accelerating for the last 30 years, and as in the Great Depression, may actually exacerbate the conditions that prohibit recovery from our current Great Recession.
The bill passed in the House by a final vote of 277 to 148, with 139 Democrats and 138 Republicans voting yes while 112 Democrats and 36 Republicans voted no.