Today in Washington, D.C. - Sept 16, 2010 - Growing Chorus Amoung House Dems: "It's Not Good Policy To Raise Taxes In A Recession"

Today, the Senate passed the Democrats’ small business lending bill, H.R. 5297, 61-38. The bill allegedly creates a $30 billion government fund (stimulus) to help open lending for credit-starved small businesses, cut their taxes and boost federal loan programs for them. The vote represented a victory for President Obama and sets the stage for a final vote in the House, which is likely to approve it for Obama's signature.

As the debate over whether to allow a massive tax increase in January continues on Capitol Hill, a few telling news stories came out yesterday afternoon, showing a growing bipartisan chorus against tax hikes on any Americans.   The AP reported, “More Democrats joined Republicans on Wednesday in calling for the preservation of tax breaks for Americans of every income level, bolting this election season from President Barack Obama's plan to preserve cuts for those who earn less than $200,000 and let taxes for the wealthy rise. ‘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.”

According to CNN, “Thirty-one House Democrats, most of whom face tough re-election bids this fall, have signed a letter to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging them to extend expiring tax breaks for all income levels, including the wealthy. . . . The letter–written by Utah Rep. Jim Matheson, Illinois Rep. Melissa Bean, Virginia Rep. Glenn Nye and Michigan Rep. Gary Peters–states that after listening to economists, small businesses and families over recent weeks they are concerned that ‘raising any taxes right now could negatively impact economic growth.’”

CNN noted, “[W]ith more than 30 Democrats now signed on to the final letter, Democratic leaders will face increasing pressure to address the concerns of these moderate members.” And Dow Jones added, “Democratic leaders are facing stiff headwinds as they try to unify their party around a plan to let taxes on upper-income people increase. . . . Democratic leaders are fighting back with new polling data that shows majorities of likely voters favor letting taxes on the wealthy rise. But many Democrats are unpersuaded. The polling at a national level may not reflect voter sentiment in their individual districts. And some claim there is a visceral dislike of tax hikes that belies the polls. ‘In my head, I know it's not good policy to raise taxes in a recession. And in my heart, I know it's bad politics to raise taxes at any time,’ said Rep. Michael McMahon (D-NY). ‘That's why I question the polls.’”

Indeed, other polls suggest that Rep. McMahon is on the right track. The AP reports today, “Almost half the country opposes tax increases for the richest Americans, according to a poll suggesting that congressional Democrats are taking some risk by backing President Barack Obama's plan to boost levies on the wealthy.” The AP notes, “While about three-fourths of Democrats favor raising taxes on the rich, about half of independents and nearly two-thirds of Republicans oppose the idea. Support for cutting everyone's taxes exceeds four in 10 people in every region of the U.S. except the Midwest, where one-third back the proposal. Even among people earning under $50,000 a year - mainstays of the Democratic Party - 43 percent want to continue the tax cuts for all.”

As Senate Republican Leader Mitch McConnell told Fox News’ Greta Van Susteren last night, “I think it is important to remember that the best solution is to raise taxes on no one.” With an ever-increasing number of Democrats joining Republicans in rejecting any tax increases next year, the Obama administration and Democrat leaders are finding less support for their desire to allow taxes to go up. The Democrat House members who wrote to Speaker Nancy Pelosi put it well, when they said, “We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions. Providing this certainty will give small businesses, the backbone of our economic recovery, confidence and stability.” If President Obama really wants to help the economy and especially small businesses, he would do well to listen to this group of fellow Democrats.

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