The President's speech Wednesday was partially a response to the one made in Cleveland two weeks earlier by House Republican Leader John Boehner, whose five-point "plan" to help the economy mainly consisted of continuing George W. Bush's tax and spending policies, not enacting any new reforms, and firing President Obama's economic advisers.
As CTJ previously reported, Boehner attacked loophole-closing provisions in the recently enacted $26 billion jobs bill (H.R. 1586) by describing them as exactly the opposite of what they really are. The provisions end abuses of the foreign tax credit. These abuses allow U.S. corporations to enjoy a negative tax rate on offshore investment income, which creates an obvious incentive to shift operations, jobs and profits offshore.
Boehner wrongly claimed that H.R. 1586 "is funded by a new tax hike that makes it more expensive to create jobs in the United States and less expensive to create jobs overseas."
On Wednesday, Boehner offered what some media outlets described as a "concession," which would be to freeze in place, for two years, all the Bush tax cuts and the spending levels in effect in 2008.
This would, of course, repeal several measures meant to address the economic crisis, including the economic recovery act enacted last year. The Congressional Budget Office recently concluded that the recovery act has created between 1.4 million and 3.3 million jobs, and increased the number of full-time-equivalent jobs by between 2.0 million and 4.8 million.
In one sense, Boehner's offer really is a concession, since the Republican position has until now been that the Bush tax cuts should be made permanent for all taxpayers, rather than extended temporarily. It's possible that Boehner made this move because he knows that his position on taxes is far more precarious than media reports suggest. Plenty of polls show that the majority of Americans want the tax cuts to expire for the richest two percent of taxpayers.
There's another problem for lawmakers who want to extend tax cuts for the rich. To get their way, they will have to vote against (or even filibuster, in the case of the Senate) a bill extending the tax cuts for 98 percent of taxpayers. President Obama was right when he described his opponents as holding tax cuts for most Americans "hostage" to protect tax cuts for the rich.