McConnell Proposes State Loans, Middle Class Tax Cut
EmailThe top Republican in the Senate proposed for the first time on "This Week" that the government pass an immediate middle-class tax cut.
"A possibility would be to take a look at 25 percent [tax] rate currently applied to the middle class and lower it to 15 percent," Sen. Mitch McConnell, R-Ky., told me on "This Week."
McConnell also proposed that an economic stimulus money designated for states be a loan, not a grant.
"We want to be a part of the process, and it might make sense to lend the money to the states that will make them spend it more wisely," he said, "Nobody thinks that we ought to be spending this money on mob museums and waterslides and if the money were lent rather than just granted, states would, I think, spend it wisely and the states that didn’t need it at all wouldn’t take any."
President-Elect Barack Obama has said he wants to sign an economic stimulus package on Jan. 20th when he is sworn in.
However, McConnell said Republicans are pushing for bipartisan hearings on Obama’s economic stimulus plan.
"We want to make sure that it’s not just a trillion dollar spending bill," McConnell told me. "What I worry about here, George, is the haste with which this may be done. This is an enormous bill, it could be a trillion dollar spending spend. Do we want to do it with essentially no hearings and no input for example in the senate from Republican senators who represent half the American population. I don’t think that’s a good idea."
McConnell also suggested the Senate look at nine appropriations bills that would spend $400-billion in economic spending.
"It’s already been vetted, been looked at by both Democrats and Republicans which could pass on a largely bipartisan basis," McConnell said. "Much of that spending is related to the kinds of items that could end up in the trillion dollar spending package so that’s a place to start."
McConnell also questioned Obama’s proposal to create 20 percent of the jobs in the public sector.
"That would be 600, 000 new government jobs," he said. "That’s about the size of the post office workforce. Is that a good idea? That’s something that strikes us that we ought to look at."
In our interview on "This Week" Sen. Dick Durbin told me on that senators need to put aside bipartisan squabbling.
"We can’t pass the economic recovery plan that this nation desperately needs without bipartisan cooperation," Durbin said, "We’ve got to put aside a lot of the squabbling of the past and come together under this administration and new leadership to get the American economy back on line."
–George Stephanopoulos
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Nothing new here, Obama has for the past two years promoted a Middle Class Tax Cut, which the Republicans have been against. As far as State money, it too was to be paid back. Guess McConnel has not been reading the news or watching TV. Let’s hear some new ideas McConnel!
Posted by: SUNMAKER777 | January 4, 2009, 11:43 am 11:43 am
What if the Government was to give $100K to people? Instead of giving a stimulus package to big businesses, people would pay down there mortgages, and all the other bills, that they are behind on.
The people are the ones to stimulate the economy.
Posted by: Shannon | January 4, 2009, 11:52 am 11:52 am
Hello,
I as a person in the mist of all it’s glory live in S.C. think that insurance for the jobless must be looked at just as much as extended money.Maybe I should remind you about the medical insurance you should sign up for by 90 days after lay off,which is a scame,because more(about 80%) than half you get from unemployment would go to insurance. So who in the famly gets insurance? More than likly 1 or no 1 in the family.I know what your saying oh!you can sign up the one person with maybe prexsiting condictions.Yes you can.But,and you know it was coming,that takes about 45% of unemployment with a lot of headacks,like pay FULL for your perscriptions and we will reinverss you.I don’t know about you, but, I don’t have $1600.00 a monuth to stay a live.
So,thats why I think we should think FAST.
So
Posted by: Rosemary | January 4, 2009, 12:04 pm 12:04 pm
Now this SOB wants to cut taxes for the middle class?!?! What about over the last 8 years? What a sorry, rudderless bunch the GOP has become.
Posted by: Nub-Tail | January 4, 2009, 12:13 pm 12:13 pm
Anything the congress and senate passes whether it is a loan or a bail out or a creation of more new government jobs is not going to stimulate the economy but will only expand the deficit. What will stimulate the economy and help the middle class to regain confidence in government and wall street is investments in people who have lost jobs who can retrain themselves or start businesses and acquire new skills for available jobs, tax credits for parents supporting kids in colleges, families who are struggling to make ends meet, homeowners who are close to foreclosure, a one time check of $2,000-$5,000 to all those who have seen a 30-50% decline in their retirement savings in a government approved IRA for reinvestment in their account so that it is once again available to businesses in the form of increased mutual fund portfolios. Also increase the tax sheltered annuity to 20% $25,000. Passing a health plan with reasonable premiums that will insure the unemployed, self employed, college students and all children up to the age of 18 without any preconditions. Invest in innovative businesses in the form of loans or equity in new businesses with preference for renewable energy and green jobs. What the government, congress and senate should never do is give into earmarks, pork or those so called deceptive shovel ready projects or schemes to swindlers with open pockets waiting for government funds to fall in. If there has to be a change it has to be a trickle up from the people to businesses and government and not the trickle down from government and businesses to the people which has brought economic disaster. We the people are not going to be benefited by a trickle down because the cost of operation of the government and businesses (excessive executive salaries and bonuses) has sky rocketed and there is nothing that trickles down to the people from the tax revenues by the route of the government and the McConnells, Pelosis and Reids and the CEOs of wall street. I will call it a change when the people are once again empowered and stimulated economically before any of the ridiculous shovel ready projects of diverting monies to cover mismanaged state budget shortfalls. One of the outrageous items of the stimulus plan has been computerization of the health system. Who is going to benefit from this. I don’t think any American wants their health records on a government computer system unless the information is strictly confidential and is going to be used for providing the best health care. If not it is a violation of human rights and not worthy of the scarce tax dollars. Obama seems to be getting bad advice from the so called economic brains (whose selection was cheered by wall street) who are no different in their thinking and training from the Paulsons of the Bush administration. It is time that main street decides what is best for them and not wall street insiders. Obama please don’t start on the wrong foot. Take all the advice but make your own decisions and thanks for floating up the trial balloon of the economic plan to the public. I hope I have poked enough holes to prevent it from going too far. Obama must succeed, failure is not an option.
Posted by: gjkotw01 | January 4, 2009, 12:33 pm 12:33 pm
gjkotw01 “Obama must succeed, failure is not an option.”
No, unfortunately failure is inevitable as long as the government believes they can spend their way out of the economic mess. The fed has pumped nearly 8 TRILLION dollars into the economy over the last two years and yet our economy gets worse. We have simply hit a point where adding additional debt will no longer mask the underlying problem, which is – our national debt. When the fed prints money it is printed on a guarantee of some future good or service being produced, IE: it is an instrument based on debt. As long as the money put into the system balances with the production from the system everything is OK. Today we do not have this balance. In fact, we have increased our debt at a very reckless rate. This debt created an artificial increase in our economy that needs to be brought back into line. The debt that we are now trying to service is beyond our means and in all likelihood will never be paid back.
The bottom line is we will need to go through a lot of pain to correct the excesses of the past 78 years and the longer we wait the worse it will be. We have mortgaged our childrens future and their childrens future and we have nothing positive to show for it; we need to take on the responsibility today so their future will be restored. What does the pain of correction look like? One option, default on our debt to wipe it out. I believe this is the best option since it will lead to a situation where no one will lend money to the government again and we will be forced to live within our means. The second option is to allow an economic correction to take place. This means letting companies that can’t make it go bankrupt and mandating not only a balanced budget but a budget that requires a surplus to pay down our debt (this will absolutely not happen unless every politician in Washington is replaced).
Unless Obama shows an understanding of this issue and shows he will do the hard work required to fix the problem then we should stand up to strongly oppose him. We have reached a point where we simply do not have many options left and the longer we continue with the failed choice of deficit spending the worse we all will be in the end.
http://www.marketoracle.co.uk/Article7939.html
http://market-ticker.denninger.net/archives/709-Why-What-Theyre-Doing-Cant-Work.html
Posted by: James | January 4, 2009, 1:45 pm 1:45 pm
There is no measure by which the Republicans in the Senate represent half the American population. Even allowing that all the citizens in states with split representation are entirely represented by both of their Senators, the percentage of the population represented by each party in the current Congress is 55% Democratic/45% Republican, and 60/40 in the next. If we split the population of split states between the parties, the percentage of the population represented by each party is 57% Democratic/43% Republican now and 64/36 in January.
The Republicans use the constitutional anomalies of the electoral college and Senate representation to overstate their popular support in the country. This has allowed them to pressure our representatives to move towards an imaginary center far right of the sentiments of their constituents. We can at least demand that they get the numbers right.
If each state is “more purple” than the network election night maps indicate, the country itself is more Liberal than the Conservatives would like us to know.
Posted by: Gevin Shaw | January 4, 2009, 1:51 pm 1:51 pm
James. Good thoughts and I agree that serious steps to deal with the deficit must be taken and if it means trimming the government spending (including wars)by 50% then so be it, but without the urgently needed stimulus cum investment package directly targeted for the working middle class, the people of this generation are going to suffer for the excesses of the past 78 years which you have referred to. It may result in expanding the deficit but will have some benefit in deficit reduction in the long run from job creation and tax breaks. Obama is walking a tight rope and has a difficult task of stimulating the economy and paying off the deficit. It is not fair to burden him with the deficit he did not create and not being able to do something constructive, well thought and productive in the long run. Most economists including a recent Nobel laureate think that there is room for further deficits. I don’t agree with that assessment and seems like you don’t either, but a well targeted investment in the people of America that would stimulate the economy, may be worth considering and I certainly would have an open mind to hearing out the other new ideas or seeing the plan. If it is flawed hopefully we can oppose it and people like you and I can share our thoughts on what is wrong and how it will not work for the intended purpose.
Posted by: gjkotw01 | January 4, 2009, 2:17 pm 2:17 pm
gjkotw01, the only problem with a stimulus package is that it will not be offset with spending reductions that could be realized without hurting the economy (IE: eliminating government jobs). Unfortunately, Obama is proposing 600,000 new government jobs. If the stimulus included these offsets I would be all in favor of it. Without that matching reduction in cost we will add another trillion dollars to the debt. We will pay 30-50 billion dollars every year, for decades and maybe forever, to service this debt because we have a government that will not quit spending money. The question really is whether we will selfishly assume this new debt for a short lived improvement for ourselves today or if we will take a longer term look at this and do the responsible thing for our children. I am convinced that Obama will take the same road that Bush took and will simply kick the can down the road for someone else by covering the problem with more debt. There just doesn’t seem to be a strong leader on either side right now. In short, I am not optomistic.
Posted by: James | January 4, 2009, 2:33 pm 2:33 pm
A tax cut for anyone at this point in time is so irresponsible that I have difficulty dealing with it and McConnell is a nutcase. I do not know why anyone would want to listen to him.
Posted by: jan | January 4, 2009, 3:00 pm 3:00 pm
State’s “loans” is a JOKE because particularly when we know that the states will NOT be able to pay it back.
Posted by: Amoreena | January 4, 2009, 3:12 pm 3:12 pm
What do you expect from Republicans but obstructionism, and opposition to anything that could help average people? If it doesn’t siphon off money for fat cats, they aren’t interested. You’d think after their failure of the past fourteen years since Gingrich’s Contract to Destroy America, you’d think these people would have done enough damage to everyday Americans to satisfy their desire for class warfare against the poor, but NO…..They want to get in the way of efforts to fix the major, major problems this country faces. They want to stand in the way. These POS’s need to be knocked out of the way. Obama will find there is no working with them. They are intransigent ideologues who will never change, even in the light of evidence or experience. I hope Obama vetoes every piece of legislation that could benefit these conservative states that voted in the likes of Boehner, Cornyn, Corker and McConnell.
Posted by: JL | January 4, 2009, 3:50 pm 3:50 pm
I love how people post long arse paragraphs on here – like we really care what you have to say! Call someone, get more friends, something .. sheesh!
Posted by: Marcus | January 4, 2009, 3:59 pm 3:59 pm
how do they figure $16.00 extra on your paycheck each wk. is going to stimulate the economy? what can you buy for that amt. that will help the economy–nothing. prices are outrageous!! also, this probably means less back at income tax time. the middle-tax cut was a ploy to get a vote & that’s all.
Posted by: debraa2704 | January 4, 2009, 4:41 pm 4:41 pm
Taxes should only be paid for anyone that makes over 150 thousand dollars, and for all registered republican.
Now thats fair!
Posted by: GHM | January 4, 2009, 5:25 pm 5:25 pm
you didn’t post my commit – why???
Posted by: GHM | January 4, 2009, 5:29 pm 5:29 pm
“If there has to be a change it has to be a trickle up from the people to businesses and government and not the trickle down from government and businesses to the people which has brought economic disaster.”
Care to explain how trickle down economics does not work, but trickle down job loss DOES????
When was the last time anyone got a job from someone who was less wealthy than they were?
Unless you & Obama can create jobs that do not report to anyone and serve no useful purpose (OOPS, sorry I didn’t mean to offend all those government workers who already have a job fitting that description), the jobs I know of come from some form of a business!
I’m still waiting to hear how unemployed high tech workers, workers from the retail marketplace and others are supposed to get jobs “rebuilding the country’s infrastructure”!
Of all those on the unemployment rolls right now, how many are people with skill sets aimed at the road & building construction market?
Oh by the way, anyone remember the….BIG DIG???? If we dont have the ability to trace every penny from this “package”, it will make the billions wasted in the Big Dig seem like your pocket change!
Posted by: Mike_C | January 5, 2009, 12:51 pm 12:51 pm