Right and left punches at Obama and Congress Tax Plan
Let me weigh in with an uppercut.
Robert Reich commented last evening on a television program that he thinks Moody’s is right about their assessment of the tax deal. It will increase the deficit and not provide sufficient return in needed job creation and economic growth. I agree.
Of course Mitt Romney agrees too.
So the left and right are throwing punches at the political deal that doesn’t solve the problem and may make it worse. Politicians, the President and Congress have their eyes swollen and can’t see the truth and the next punch.
“Attacks From Right Take Toll on Obama's Tax Plan
Published December 15, 2010
WASHINGTON -- A growing chorus of conservative criticism is prompting some House members to rethink the $850 billion package of tax cuts and extended jobless benefits that President Barack Obama negotiated with top Republicans in Congress.
The attacks are unlikely to derail the measure, which gets a final vote Wednesday in the Senate, to be followed by a debate and vote in the House. But they underscore the difficulty of building centrist coalitions after an election in which tea party conservatives ousted many Democrats and some veteran Republicans who were seen as too willing to compromise with opponents.
“Moody's warns on tax cut deal
Posted by Colin Barr
December 14, 2010 9:09 am
Moody's is the latest to warn that the tax deal could imperil the United States' fiscal position.
The rating agency said in a report Monday that last week's agreement between the White House and congressional Republicans should bolster economic growth in the next two years – but at the expense of the nation's already perilous budget position down the road.
The agreement to extend the Bush tax cuts for two years and trim workers' payroll tax contributions for one could raise the U.S. debt-to-GDP ratio at 2012 to 72-73% from around 62% now, Moody's said. It said that without the tax package, that number might have been around 68% in 2012.
Another problem is that under the tax cut package, the ratio of the government's outstanding debt to its annual tax take will decline less sharply, to just under four times. Moody's called that "a very high ratio," both historically and compared to other highly rated government debt issuers.
It warned that unless Congress gets its act together, it could see a once unthinkable downgrade of the U.S. credit rating on its watch, which could balloon U.S. borrowing costs and make our financing position much more costly.
"Unless there are offsetting measures, the package will be credit negative for the US and increase the likelihood of a negative outlook on the US government's Aaa rating during the next two years," Moody's said.”
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