Weak Economy Fails to Deter Democrats’ Demand for Tax Hikes

Instead of Kicking Trillion-Dollar Deficit Habit, Democrats Push for Job-Destroying Tax Increases on Families and Small Businesses

The dismal economic forecasts of the past few days have sparked new fears of an additional economic slowdown and double-dip in home prices, amidst declining consumer confidence and weakening growth:

“ECONOMISTS DOWNGRADE PROSPECTS FOR GROWTH”: “A growingnumber of forecasters are downgrading their second-quarter growth predictions. JPMorgan Chase & Co. economists revised down their estimate to a 2.5% rate from 3%, while Bank of America Merrill Lynch economists cut theirs to 2% from 2.8%. Deutsche Bank cut its forecast to 3.2% from 3.7%.” (Sara Murray And Jon Hilsenrath, “Economists Downgrade Prospects For Growth,” The Wall Street Journal, 5/31/2011)

“DOUBLE DIP IN HOUSING PRICES EVEN WORSE THAN EXPECTED”: “U.S. single-family home prices dropped in March, dipping below their 2009 low, as the housing market remained bogged down by inventory and weak demand, a closely watched survey said Tuesday. … The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover. … ‘This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,’ David Blitzer, chairman of the index committee at S&P Indices, said in a statement. ‘Home prices continue on their downward spiral with no relief in sight.’” (“’Double-Dip’ in Housing Prices Even Worse Than Expected,” Reuters, 5/31/2011)

CONSUMER CONFIDENCE HITS NEW LOW: “Americans are losing faith that the economy will keep improving, according to a monthly survey.

“The Conference Board’s Consumer Confidence Index fell to a six-month low of 60.8 from a revised 66 in April, a sign of the toll that high gas prices, a choppy job outlook and a moribund housing market are taking on people’s psyches. Economists had expected an increase to 67.” (Mae Anderson, “Consumer Confidence Falls Unexpectedly in May,” Associated Press, 5/31/2011)

Amidst this disappointing economic news, however, Democrats aren’t budging in their push for the same job-destroying policies. Since Democrats maxed out the nation’s credit card, House Republicans are lobbying for significant spending cuts to accompany any increase in the debt limit. Democrats have insisted in recent days that any deficit reduction package must include trillions of dollars in tax increases:

WHITE HOUSE PRESS SECRETARY JAY CARNEY:  WE NEED TO “ADDRESS SPENDING IN THE TAX CODE.” “Look, we obviously feel strongly that you need to take a balanced approach if you’re going to come up with significant — in our proposal — $4 trillion of deficit reduction over 10 to 12 years.  That would have to include addressing spending in the tax code.” (“Press Briefing by Press Secretary Jay Carney and Assistant to the President for Manufacturing Ron Bloom,” The White House, 6/1/2011)

DNC CHAIR REP. WASSERMAN SCHULTZ (D-FL) SELLS TAX HIKES UNDER GUISE OF “SHARED SACRIFICE”: “What we need to sit down and–around the negotiating table and agree on is that there needs to be some shared sacrifice.” (Remarks from Rep. Debbie Wasserman Schultz, CBS’ Face the Nation, 5/30/2011)

REP. DONNA EDWARDS (D-MD): “The Republicans are being disingenuous when all you do is talk about the spending cuts, only a portion of the budget,and then not also talk about revenue increases.” (Remarks from Rep. Donna Edwards, Fox News Sunday with Chris Wallace, 5/30/2011)

Democrats are sticking to their plan for more job-destroying tax increases, despite mounting evidence that it’s a terrible idea. Indeed, Democrats have been calling for tax hikes amidst the weak economy for a long time:

“DROOPY ECONOMY” MEANS OBAMA’S TAX HIKE DEMANDS ARE “PROBLEMATIC”: “The droopy economy makes Obama’s demands for tax hikes even more problematic. That is a current dilemma as he tries to reach a deal on the debt ceiling.” (Jennifer Rubin, “The Poor Economy Complicates Obama’s Debt Ceiling Position,” The Washington Post, 6/1/2011)

OBAMA SAYS AUTOMATIC TAX INCREASES ARE DEBT SOLUTION: “Well, I — I think what we’re going to end up having to do probably — is to set some targets, and say — you know, those targets have to be hit if not automatically, some cuts and tax increases start taking place.” (CBS News Town Hall with President Obama, 5/12/2011)

GEITHNER FOLLOWS HIS LEAD: “He added that pushing for large budget reductions without new sources of revenue is ‘not responsible.’” (Jeffrey Sparshott and Javier E. David, “Geithner Warns On Debt Ceiling, Talks IMF Crisis,” Dow Jones, 5/17/2011)

DEMOCRAT LEADER NANCY PELOSI: “ ‘I don’t see how you can possibly talk about serious deficit reduction … without considering a change in the revenue scheme,’ said Rep. Nancy Pelosi (D-San Francisco), the minority leader.” (Lisa Mascaro and Christi Parsons, “Seeking Debt Accord, GOP Backs Off Medicare Revamp,” Los Angeles Times, 5/5/2011)

DEMOCRATS BACK AUTOMATIC TAX INCREASES: “While Democrats back a White House approach that would force automatic tax increases or spending cuts to ensure the government hits thresholds for reducing the debt, Republicans want a hard cap on spending that would not force tax increases of any kind.” (Erik Wasson, “Debt Talks Open with Split on Tax,” The Hill, 5/05/2011)

Unfortunately for Democrats, their call for tax increases amidst a weak economy remain politically toxic among voters. Will House Democrats side with President Obama on increasing taxes as families struggle, or will they work with Republicans to renounce their big-spending agenda of the last two years?:

“Presented with a menu of choices to help curb the national debt and federal deficit, almost half of voters — 45 percent — support spending cuts alone, the poll indicates. By contrast, only 13 percent favor an even split between cutting spending and raising revenue through tax increases.”

“Speaker John Boehner (R-Ohio) insisted last week that taxes were ‘off the table’ in negotiations over the deficit. By contrast, prominent Democrats including Senate Majority Leader Harry Reid (Nev.) have advocated a 50-50 split between tax increases and spending cuts.” (Niall Stanage, “THE HILL POLL: Voters find recession blues difficult to shake,” The Hill’s Ballot Box Blog, 5/16/11)