A misplaced priority

Saturday, Aug. 7, 2010 | 2:01 a.m.

Election season is fast upon us, which means it is time for congressional Republicans to regurgitate trickle-down proposals they always say will boost the economy. Their theory is that if you give an economic benefit to the wealthiest Americans, it will automatically help middle- and lower-income earners, too.

This is the logic they have employed while arguing that it would be a mistake for the Obama administration to permit the 2001 and 2003 tax cuts adopted under President George W. Bush to expire at the end of this year for the nation’s wealthiest 2 percent of taxpayers. After all, Republicans say, these are the individuals who do the hiring and pay the wages of everybody else.

Why, then, was the eight-year tenure of Bush such a bust when it came to job creation? An analysis undertaken last month by the Cleveland Plain Dealer of Labor Department statistics found that the Bush years netted only 1.1 million new jobs, a paltry figure when compared with the 22.7 million jobs that had been created the previous eight years under President Bill Clinton.

Instead of creating jobs in substantial numbers, the Bush tax cuts sharply drove up the nation’s budget deficit. Newsweek columnist Fareed Zakaria wrote this week that those tax cuts cost the nation $2.3 trillion. Treasury Secretary Timothy Geithner has said that extending the tax cuts to the wealthiest Americans would force the country to borrow an additional $700 billion over the next 10 years while doing little to spur growth.

As quoted in The Washington Post, Geithner said in a speech Wednesday: “There is no credible argument to be made that the purpose of government is to borrow from future generations of Americans to finance an extension of tax cuts for the top 2 percent ... It’s not the prescription the economy needs right now, and the country can’t afford it.”

What Americans need most right now are jobs, an immediate boost that trickle-down economics does not provide. The Obama administration is on the right track by pushing for an extension of tax cuts that would directly benefit 98 percent of American taxpayers, including families that make less than $250,000 annually and individuals who earn less than $200,000. As for arguments from Republicans that an end to the tax cuts for the wealthiest taxpayers would hurt small businesses, the administration responds that only 2 percent of those businesses would be adversely affected.

While focusing only on the wealthiest taxpayers, Republicans have turned their backs on everyday Americans, including the vast majority of small-business owners. If Republicans truly wanted to help revive the economy, they would support Democratic-led efforts to make it easier for small businesses to borrow money and give all Americans a greater chance to save their jobs and their homes.