Kirkpatrick: Keep tax cuts for wealthy

2010-09-17T05:05:00Z Kirkpatrick: Keep tax cuts for wealthyCYNDY COLE and THE ASSOCIATED PR Sun Staff Reporter Arizona Daily Sun

U.S. Rep. Ann Kirkpatrick, D-Flagstaff, has joined with Republicans and 30 other Democrats in support of extending tax cuts passed under President Bush for all income classes, including the wealthy.

This is a reversal of statements by Kirkpatrick during her 2008 campaign, when she said the tax cuts for the wealthy should be repealed, while tax cuts for 86 million in the middle class should be increased.

The severity of the recession is behind her decision this year, said her spokesman.

"The congresswoman supports extending these tax cuts across the board at this time, and she signed a letter to that effect," her office said, in a written statement. "Rep. Kirkpatrick has always said that in this recession, creating jobs and getting folks back to work is her top priority. There is concern that our economic recovery could be slowed by allowing this relief to expire right now, rather than pushing us towards the growth and development we all want."

WEALTHY SAVE MORE

The expiring tax cuts are the most sweeping in a generation, affecting taxpayers at every income level. Obama wants to make the tax cuts permanent for individuals making less than $200,000 and married couples making less than $250,000.

Republicans support a full renewal of all tax cuts, regardless of income, despite a 10-year cost to the government of about $700 billion above Obama's plan.

Obama and the Congressional Budget Office have cited studies indicating the wealthy tend to save more than the middle-class and that a reinvestment of the extra tax revenue in job-creation tax credits for businesses would lead to three times as much economic growth as tax cuts for the wealthy.

WEALTHY SPEND MORE

But the letter signed by the Democrats contends that although the wealthy save more, they also spend more.

"While those in the highest income brackets comprise only 2 to 3 percent of American taxpayers, economists estimate that they are responsible for 25 percent of national consumer spending," the letter read, in part.

Kirkpatrick did not commit to budget cuts or means of funding the new tax cuts.

"The congresswoman is looking into a range of options of how to pay for the extension, such as using funds already saved through the pay-as-you-go law to offset. She is committed to only supporting an extension that meets PAYGO requirements," Kirkpatrick's office said in a statement.

More Democrats joined Republicans on Wednesday in calling for the preservation of tax breaks for Americans of every income level.

"We should not be raising taxes in the middle of a recession," Rep. Jim Marshall, D-Ga., who's facing tough odds in his bid for a fourth term, wrote in a terse letter to House Speaker Nancy Pelosi.

"It is essential that we keep things as they are in the short term," said Rep. Travis W. Childers, D-Miss., another conservative incumbent in a tight race, whose district, like Marshall's, voted for Republican John McCain in the 2008 presidential race.

COMMON GROUND ELUSIVE

House and Senate leaders aren't saying which plan they'll propose, or whether they'll even bother with the debate in the charged political atmosphere leading up to the Nov. 2 midterm elections.

All 435 House seats, 37 in the Senate and the Democratic majorities in both houses are on the line.

The divisions extended well into Democratic ranks on Capitol Hill. Moderates and conservatives in tight races were skittish about the prospect of being branded tax hikers at the height of election season if a bill to let taxes rise for the wealthy is brought up for debate.

Other Democrats said they relish the idea of holding a vote to extend only the middle class tax cuts and daring Republicans to vote against it.

"I want to smoke some people out," said Rep. Bill Pascrell, D-N.J., a supporter of the Obama plan who nonetheless said he was open to compromise.

Common ground was less the issue than whether punting the matter until the end of the year might be politically helpful.

VOTE UP IN AIR

Democratic leaders would not commit to a full debate or a vote in the handful of weeks before Congress leaves town for the campaign trail.

Asked directly Wednesday whether Congress should take up the tax cut issue before or after Election Day, Pelosi did not answer. Her lieutenant, Majority Leader Steny Hoyer of Maryland, sounded open to discussing compromises but did not say when those talks might happen.

Republicans, meanwhile, stayed together on their tax-cuts-for-all message and pressed for action before leaving town in October to go home to campaign. House Republican leader John Boehner, who over the weekend had suggested he would vote for Obama's plan if that were the only option offered him, stuck to the party's message Wednesday.

"If we're serious about helping our economy this month we need to stop the tax hikes, and we need to cut spending," Boehner said.

Associated Press writers Stephen Ohlemacher and Kevin Freking contributed to this report.

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