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WH: Tax Defeat May Trigger ‘Double-Dip’

From an unquestioning Associated Press:

WH warns tax defeat could trigger new recession

By Charles Babington, Associated Press Wed Dec 8, 2010

WASHINGTON – Raising the direst alarm yet, the Obama administration warned fellow Democrats on Wednesday that if they defeat the big tax-cut compromise detested by many liberals, they could jolt the nation back into recession.

President Barack Obama appealed anew for Congress to "get this done" and insisted that more congressional Democrats would climb aboard as they studied details of the $900 billion year-end measure.

Several did announce support on Wednesday, but at least one said there still was "a mood to resist."

One Democratic opponent, Rep. Barney Frank of Massachusetts, forecast a result that would abruptly reverse Congress’ voting pattern of the first two years of Obama’s term: "It will be passed by virtually all the Republicans and a minority of Democrats." He said he would vote against it.

Some top Democrats, however, warned that growing anger over an estate tax proposal could prompt massive defections.

"The jury is still out," said Rep. Chris Van Hollen. He said many colleagues are dismayed that Obama, without consulting lawmakers, agreed to a lower tax on the estates left by wealthy people, which will cost the government billions of dollars in revenue and benefit relatively few large estates.

As usual, the Democrats any tax reduction as ‘costing the government revenue.’ Never mind that cutting tax rates often brings in more revenue in the long run.

By the way, do you think the estate tax will weigh on the minds of those on the Obama-care ‘death panels’? Won’t a high ‘death tax’ rate encourage the bureaucrats to kill off more rich old people? Where is the AARP?

Larry Summers, Obama’s chief economic adviser, told reporters that if the overall tax package isn’t passed soon, it will "materially increase the risk the economy would stall out and we would have a double-dip" recession. That put the White House in the unusual position of warning its own party’s lawmakers they could be to blame for calamitous consequences if they go against the president…

Summers’ remarks contrasted with Obama’s comments at a news conference Tuesday. "We don’t have the danger of a double-dip recession," the president said then, noting the impact of the 2009 stimulus bill and other measures meant to steady the economy

Pelosi and other House Democratic leaders continued to remain outwardly neutral to the tax cut compromise, criticizing some aspects but stopping short of urging or predicting its demise.

For a second straight day Wednesday, Vice President Joe Biden traveled to the Capitol to meet privately with Democrats — this time in the House, after visiting senators on Tuesday. Aides distributed a color-coded chart labeled "what we got," and "what they got," indicating that Democrats won more concessions in the tax deal than did Republicans…

Biden took a tough stance, warning that any changes might unravel the compromise plan, said several House Democrats who attended the meeting. "The vice president said, ‘this is the deal, take it or leave it,’" said Rep. Henry Waxman, D-Calif.

And nobody messes with Joe. But doesn’t it sound like he is trying to sabotage the deal? Of course, who can tell with Bite Me?

The White House ballyhooed almost any elected Democrat who endorsed the tax plan, with no state or city too small to justify a press release. Vermont Gov. Jim Douglas and Charlotte, N.C., Mayor Anthony Foxx were among those praising the plan, the White House announced

[A] co-leader of Obama’s deficit-reduction commission said he was deeply disappointed that the tax agreement includes no firm commitment for long-term federal fiscal restraint. Erskine Bowles, a chief of staff in the Clinton White House, made the remarks at a Wyoming event

The "deficit-reduction commission? That is ancient history. They changed the discussion so dramatically in Washington, that a week later here they are adding another trillion dollars to the deficit.

Indeed, the deficit commission had almost as much effect on Washington as the midterm elections.

As the article notes, Mr. Summer’s ‘warning’ contradicts what Mr. Obama himself said on this subject in his press conference on Tuesday:

This is not as significant a boost to the economy as the Recovery Act was, but we’re in a different situation now. I mean, when the Recovery Act passed, we were looking at a potential Great Depression and we might have seen unemployment go up to 15 percent, 20 percent — we don’t know. In combination with the work we did in stabilizing the financial system, the work that the Federal Reserve did, that’s behind us now. We don’t have the danger of a double-dip recession.

Which is it?

This article was posted by Steve on Thursday, December 9th, 2010. Comments are currently closed.

6 Responses to “WH: Tax Defeat May Trigger ‘Double-Dip’”

  1. proreason says:

    Fantasy Island

  2. Rusty Shackleford says:

    I think we’re actually approaching the arena where even the least aware are noting the lies and obvious shell game from the “most ethical congress in history”. These people are truly remarkable in that they keep up with the charade long after the curtain has been pulled away from the wizard.

    Again, I have to fall back on that remark that Charlie Brown made to Lucy about kicking the football: “I don’t mind your dishonesty half as much as I mind your opinion of me; You must think I’m stupid.”

    But then, Charlie Brown did run up and try to kick that football anyway, didn’t he?

  3. tranquil.night says:

    Great note of the contradiction from the presser Steve.

    By releasing this media memo that’s basically a “threat of crisis in the event of inaction,” would it be accurate to say this White House is holding the economy hostage in the name of “tax cuts” for the “rich”?

  4. untrainable says:

    Well, I know I base my entire fiscal existance on what the president says about the economy. C’mon! Anyone who takes ANY of these Washington weasels at their word is woefully misguided or, more likely, just plain stupid. They are proving the old saying. Oh what a tangled web they weave, when first they practice to lie their a$$es off, steal our money to enrich themselves and their cronies, and intentionally collapse the economy to gain personal power.

  5. MinnesotaRush says:

    “WH warns tax defeat could trigger new recession”

    … but a 7 year moratorium on oil exploration and production as well as nationalizing every possible industry that can be had, etc, etc won’t hurt a thing!?!?!?

  6. JohnMG says:

    …..”if the overall tax package isn’t passed soon, it will “materially increase the risk the economy would stall out and we would have a double-dip” recession……”

    It would be a shame to see this robust recovery we’re experiencing get nipped in the bud, wouldn’t it?

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