When is a budget-buster not a budget buster? Apparently when it benefits the wealthiest–those whose heirs would enjoy millions of tax-free dollars under legislation the White House wants and the House of Representatives just passed.
President Obama said that health care reform had to be deficit-neutral. Lead Democrats and Republicans in the Congress agreed. We’ve had months of wrangling, countless cost analyses and successive retrenchments in the interests of producing a bill that costs no more than it saves.
The economic stimulus package was cut back because of fears about the deficit. We’re given to understand that further investments to address the alarming unemployment rate will be limited because the President wants to deliver on his promise to cut the deficit.
But the President’s proposed Fiscal Year 2010 budget included a permanent extension of the Bush administration estate tax cuts. Without it, the estate tax will revert to its pre-Bush level after a year of no estate tax at all. With it, the maximum tax rate will remain 45%, levied only on estates valued at $3.5 million per person and $7 million per couple.
The House adopted the permanent extension last Thursday on a vote of 225 to 200. The Center on Budget and Policy Priorities estimates the prospective revenue loss at $391 billion over the first 10 years.
But the cost won’t have to be offset by spending reductions. The House made a specific exemption for estate and gift taxes when it passed the Statutory Pay As You Go Act to enforce fiscal discipline.
You’d think that our cost-conscious legislators would be satisfied with the proposed give-away. But no.
Senator Max Baucus (D-MT), Chairman of the Finance Committee, reportedly wants to index the tax for inflation. Firedoglake blogger David Dayen says this would cost an additional $23 billion.
Meanwhile, Senators Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) are again (or still) pushing for an even bigger tax break. Their proposal would lower the top rate to 35% and exempt the first $5 million per individual and $10 million per couple. CBPP estimates the cost for the first 10 years at $100 billion more than the straightforward extension of the current rates.
Just think what $491 billion could do for the 15.4 million Americans who are out of work. But, of course, when it comes to helping them, we’ve got to consider the deficit.