Quad-City Candidates Clash Over Tax Cuts
The debate in Washington, D.C., about whether to extend the tax cuts enacted during the Bush administration is playing out in the Quad-Cities, too.
The Republican challengers in Iowa's 1st and Illinois' 17th congressional districts say they want to extend all the tax cuts enacted in 2001 and 2003 permanently, including those benefitting people at the top of the income ladder.
The Democratic incumbents say they're more eager to focus on extending just those for the middle class.
The tax cut debate, coming in the midst of an economic downturn, is coming to a head less than two months before voters go to the polls to decide who will control the Congress next year.
Republicans like Bobby Schilling, a pizzeria owner, say failing to extend any of the tax cuts will be a drag on job creation.
"It will be a very sharp blow to our economy," he says.
However, in a year when the growing national debt also is a rising concern among voters, Democrats warn the Republican plan to make all the tax breaks permanent will open an even greater flow of budget red ink.
"They're completely lacking in responsible solutions to the problems we're facing," said U.S. Rep. Bruce Braley, D-Iowa.
The Congressional Budget Office, or CBO, says extending all the tax cuts would reduce revenues $2.7 trillion over 10 years.
Making just the two top rate cuts permanent would cost the treasury $700 billion alone.
The overall cost would grow to $3.7 trillion if, as expected, Congress limited the impact of the alternative minimum tax.
Schilling and Ben Lange, the Republican seeking Iowa's 1st District congressional seat, take different approaches when it comes to the deficit question.
Lange says the cuts would reduce revenue, but that unspent bank bailout and stimulus funds, as well as a freeze on federal hiring and pay increases, would help to fill the gap.
Schilling says he doesn't think extending the tax cuts will cost the treasury at all.
He says the tax cuts will stimulate enough revenues to pay for themselves.
"The CBO, I don't believe to be credible," he said.
U.S. Rep. Phil Hare, D-Ill., says now is not the time to extend tax breaks for the wealthy, who he says have "done real well" over the past 10 years. That $700 billion, he says, would be better devoted to building new roads, bridges and railroads.
He cited a transportation bill floated by some House Democrats that's been stymied.
"If you're curious about getting people back to work ... pass that bill," he said.
Braley also says that rather than get gridlocked by a debate over the two top rates, "we need to focus on making the tax cuts on the middle class permanent."
Asked about how to pay for those extensions, Braley says the budget needs a broad-based examination, on both the revenue and spending side.
He noted a three-year spending freeze on some domestic programs the president announced earlier this year should have included the Defense Department.
Lange and Schilling, meanwhile, both like parts of a proposal floated about a week ago by Peter Orszag, former budget director for President Barack Obama.
Orszag said a compromise would be to extend all the tax cuts for two years, but then get rid of them after 2013.
Lange and Schilling like the extension, but both reiterate they'd make the tax cuts permanent after that.
Obama has rejected the two-year extension idea.