Crossroads’ Only Evidence Of Tax-Hike Votes Is A Never-Enacted Budget Proposal From 2007 That Allowed The Scheduled Expiration Of The Bush Tax Cuts

The ad cites Rep. Berkley’s Vote #377 on May 17, 2007, in which the House approved a budget proposal for FY 2008, to support the claim that Rep. Berkley ‘voted for tax hikes that make it worse.’

F.Y. 2008 Budget Proposal Relied On Expiration Of Bush Tax Cuts To Balance The Budget. From USA Today: “The Senate Budget Committee approved a plan Thursday that promises a federal surplus in five years — but only by assuming President Bush’s tax cuts expire at the end of this decade. […] The Democratic plan assumes Bush’s tax cuts on income, married couples, investments and inheritances will expire as scheduled unless lawmakers produce more than $400 billion in tax revenues to comply with the Democrats’ so-called pay-as-you-go rule.” [USA Today, 3/14/07]

• The Budget Proposal In Question Never Went Into Effect. According to GovTrack.us, the budget proposal “was passed by Congress on May 17, 2007 but was not enacted before the end of its Congressional session.” [GovTrack.us, accessed 4/25/12]

Letting Bush Tax Cuts Expire Is Not “The Largest Tax Increase In History”

Expiration Of Bush Tax Cuts Not The Biggest Increase In History “By A Long Shot.” From CNNMoney: “Then there is the matter of whether allowing all the Bush tax cuts to expire, would, in fact, be ‘the largest tax hike ever.’ By any fair measure, that’s not true either. To be sure, it would be a very big tax increase, raising revenues by about 2% of gross domestic product. But the biggest ever? Not by a long shot. Back in 2006, Jerry Tempalski at the Treasury Department measured the relative size of all major tax bills just since 1940 (which fits pretty well into the definition of ‘ever’). This is what he found: The Revenue Act of 1941 raised taxes by an average annual rate of 2.2% of GDP, more than the impact of letting all the Bush tax cuts expire. The Revenue Act of 1942 was even bigger. It raised taxes by a whopping 5% of GDP. Remember, we used to pay for our wars in the old days, instead of leaving the bill to our grandchildren. And, in case you were wondering, the three major tax increase bills signed by President Reagan — TEFRA of 1982, the Social Security Amendments of 1983 and the Deficit Reduction Act of 1984 — raised taxes by a combined 1.6% of GDP, not much less than what we are yelling about today. We’ve been here before: Now, there is nothing new about this ‘biggest tax cut ever’ canard. Republicans said it about President Clinton’s 1993 tax increase, which actually raised taxes by 0.63 percent of GDP. They trotted it out again in their campaign against Obama’s health bill.” [Money.CNN.com, 9/7/10]

Bush Tax Cuts Were Passed With An Expiration Date, So “Tax Increase” Was Written Into Law By Republicans. From the Tax Foundation: “But is allowing a scheduled expiration to take place even a ‘tax increase’ at all? All of the big tax increases in history have required explicit action by Congress. In this case, the ‘tax increase’ was set in law by Congress in 2001 as part of the tax cut due to Senate reconciliation rules.” [TaxFoundation.org, 9/16/10]

• Klein: “No One Who Professes Concern For Short-Term Deficits Can Argue For The Extension Of These Deficit-Financed Tax Cuts.” From Ezra Klein’s Washington Post blog: “It’s not a tax increase passed into law by Democrats. It’s a reversion to old tax rates passed into law by Republicans. It’s not how law is supposed to work. It’s the result of twisting a budget process meant to reduce the deficit so you could use it to massively increase the deficit. And as for the policy itself, it’s a fiscal nightmare: No one who professes concern for short-term deficits can argue for the extension of these deficit-financed tax cuts and retain credibility on debt issues. This is a litmus test. It’s not Democrats who are trying to pass the largest tax hike of all time, but Republicans who are calling for the largest increase in the deficit in memory.” [WashingtonPost.com, 7/19/10]

Crossroads Distorts Cost Of American Clean Energy And Security Act

The ad cites Vote #477 on June 26, 2009, in which the House passed the American Clean Energy and Security Act, and an article from U.S. News & World Report to support the claim that Rep. Berkely “voted for a massive new energy tax that would cost families $1,600 a year.”

Reuters: Experts Say House-Passed Clean Energy Bill Would Have “Only A Modest Impact On Consumers.” According to Reuters: “A new U.S. government study on Tuesday adds to a growing list of experts concluding that climate legislation moving through Congress would have only a modest impact on consumers, adding around $100 to household costs in 2020. Under the climate legislation passed by the House of Representatives in June, electricity, heating oil and other bills for average families will rise $134 in 2020 and $339 in 2030, according to the Energy Information Administration, the country’s top energy forecaster. The EIA estimate was in line with earlier projections from the nonpartisan Congressional Budget Office which said average families would pay about $175 extra annually by 2020, and the Environmental Protection Agency, which said families would pay at most an extra $1 per day.” [Reuters, 8/5/09]

CBO Estimated Cost Of ACES In 2020 Would Be $175 Per Household Per Year. From the Congressional Budget Office: ‘”Although the analysis examines the effects of the bill as it would apply in 2020, those effects are described in the context of the current economy that is, the costs that would result if the policies set for 2020 were in effect in 2010. On that basis, CBO estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion or about $175 per household.” [CBO.gov, 6/20/09]

• CBO: Energy Costs Would Actually Decrease For Low-Income Households. According to the Congressional Budget Office’s analysis of the American Clean Energy and Security Act, if the bill were implemented, “households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.” [CBO.gov, 6/19/09]

Study: Clean Energy Legislation Would Create Jobs, Boost GDP. According to an analysis by the University of California, Berkley: “Comprehensive clean energy and climate protection legislation, like the American Clean Energy and Security Act (ACES) that was passed by the House of Representatives in June, would strengthen the U.S. economy by establishing pollution limits and incentives that together will drive large-scale investments in clean energy and energy efficiency. These investments will result in stronger job growth, higher real household income, and increased economic output than the U.S. would experience without the bill. New analysis by the University of California shows conclusively that climate policy will strengthen the U.S. economy as a whole. Full adoption of the ACES package of pollution reduction and energy efficiency measures would create between 918,000 and 1.9 million new jobs, increase annual household income by $487-$1,175 per year, and boost GDP by $39 billion-$111 billion. These economic gains are over and above the growth the U.S. would see in the absence of such a bill.” [University of California, Berkeley, accessed 5/14/12]

“$1,600 A Year” Estimate Did Not Apply To ACES

CBO: $1,600 Estimate Was Not For ACES And Did Not Take Into Account Factors That Would Make Actual Per-Household Cost “Substantially Lower.” From a letter Congressional Budget Office Director Douglas Elmendorf sent to Sen. John Kerry (D-MA): “I indicated that the price increases associated with an illustrative cap-and-trade program that CBO considered would result in an average cost per household of $1,600 a year. That figure is an estimate of the gross per-household cost due to the imposition of a price on emissions; the net per-household cost, which accounts for other features of the program that would reduce households’ costs or raise their income, would be substantially lower. In addition, the $1,600 cost estimate derives from the particular cap-and-trade program that CBO examined. The cost of cap-and-trade programs that have significantly different design features, such as the one that would be established under the bill recently approved by the House Energy and Commerce Committee (H.R. 2454, the American Clean Energy and Security Act of 2009), could be significantly different. […] In fact, CBO’s estimate of the price of an allowance necessary to achieve a 15 percent reduction in greenhouse gas emissions under H.R. 2454—$16—is significantly less than the $27 price previously estimated for the illustrative cap-and-trade program for CO2 emissions. As a result, the average gross cost per household in CBO’s illustrative analysis does not reflect the cost of achieving a similar reduction under H.R. 2454.”[CBO.gov, 6/12/09, internal citations removed]

• The Article Crossroads Cites Explains That $1,600 Estimate Is Not For ACES. From the U.S. News & World Report article Crossroads GPS’ ad cites to back up its claim that Berkley voted for for a massive new energy tax that would cost families $1600 a year: “No one knows exactly how much the Waxman-Markey bill will cost Americans. Douglas Elmendorf, the director of the Congressional Budget Office, testified before the Senate Committee on Finance that cap-and-trade program costs for energy producers would be “passed along to consumers of energy and energy-intensive products,” (which would be in the form of higher prices). The CBO estimates that a 15 percent reduction in carbon emissions by 2020 through a cap-and-trade plan would cost the average American household $1,600 a year, with low-income households carrying a heavier burden. Lower-income households tend to spend more of their income on energy than higher-income households, because it is difficult to cut back on necessities like heating. The costs of the Waxman-Markey would differ from the CBO’s estimate in a few ways. The costs could be greater because the billaims [sic] to reduce not just carbon but other greenhouse gases such as methane. The costs could also be lower: When the federal government auctions off the permits, it gets revenue back that is likely to be spent.” [U.S. News & World Report, 6/12/09, emphasis added]

Bush-Era Policies And The Recession – Not A 2009 Budget Vote – Pushed Deficits “Sky High”

The ad cites Vote #216 on April 29, 2009, in which the House approved a budget plan for FY 2010, to support the claim that Rep. Berkely “supported a budget that pushed deficits sky high.”

Prior To President Obama’s Inauguration, President Bush Had Already Created A Projected $1.2 Trillion Deficit For Fiscal Year 2009. From the Washington Times: “The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn’t enact any new programs. […] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record.” [Washington Times, 1/8/09]

NYT: President Bush’s Policy Changes Created Much More Debt Than President Obama’s. The following chart from the New York Times shows the fiscal impact of “Policy Changes Under Two Presidents”:

[New York Times, 7/24/11]

Recession Added Hundreds Of Billions In Deficits By Increasing Spending On Safety Net While Shrinking Tax Revenue. The Center on Budget and Policy Priorities (CBPP) explains: “When unemployment rises and incomes stagnate in a recession, the federal budget responds automatically: tax collections shrink, and spending goes up for programs like unemployment insurance, Social Security, and Food Stamps.” According to CBPP: “The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety-net programs. Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook alone accounts for over $400 billion of the deficit each year in 2009 through 2011 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since the summer of 2008 will account for over $300 billion in added deficits, much of it in the form of additional debt-service costs.” [CBPP.org, 11/18/10; CBPP.org, 5/10/11, citations removed]

Over The Coming Decade, The Bush Tax Cuts Are The Primary Cause Of Federal Budget Deficits. The Center on Budget and Policy Priorities prepared a chart showing the deficit impact of the Bush tax cuts (orange), the Iraq and Afghanistan wars, the recession itself, and spending to rescue the economy:

[CBPP.org, 5/10/11]

CBPP: Bush Tax Cuts And Wars Are Driving The Debt. According to the Center on Budget and Policy Priorities:

The complementary chart, below, shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.

[Center on Budget and Policy Priorities, 5/20/11]