Dec. 8—Three weeks after failing to pass a massive tax cut for the wealthy, U.S. House Republican leaders muscled enough support for the $56 billion tax cut bill to pass it by 234–197 Dec. 8. This latest congressional give-away to the rich, which cuts taxes on capital gains and estates, follows a $50 billion package of spending cuts in working family programs Republican leaders squeaked through by two votes Nov. 18.
“The poor suffer. The rich benefit. The middle class pays the bill,” said House Minority Leader Nancy Pelosi (D-Calif.) during debate on the tax cut.
The $56 billion tax cut for the wealthy combined with other recent tax cuts will cost some $112 billion, according the nonprofit Economic Policy Institute (EPI), with the vast majority of the tax breaks going to the wealthy in tax cuts for capital gains and dividends, with business tax breaks a close second.
“The magnitude of these cuts—$112 billion over the next 10 years—far exceeds possible spending decreases that are being touted erroneously as deficit reduction. The composition of the tax cuts also reflects debatable priorities,” EPI said in an analysis of the tax cuts.
The Bush administration and Republican congressional leaders claim huge cuts in working family programs are needed to reduce the federal deficit and pay for Gulf Coast hurricane recovery. But the Bush tax cuts for the wealthy exceed the spending cuts and add to the federal deficit.
The House spending cut bill would cut billions from Medicaid health services for poor children and long-term care patients, student loan programs, child support enforcement, foster care and Social Security disability payments and retains millions in food stamp cuts.
The Senate approved its versions of the tax cut bill and spending bill last month. The bills now go to a House Senate conference to meld the versions. The House versions give much bigger tax breaks to the wealthy and make larger cuts in working family programs than do the Senate bills. The Bush administration backs the bigger tax breaks and spending cut levels.
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