Democrats in Congress supported tax relief for middle-class families in 2001 and our support remains steadfast today. Back then, our position was based on the understanding that the middle class forms the backbone of our economy and those families had seen an erosion of their economic security and were at risk of further decline.
We understood the fiscal challenges facing our nation and challenged the arguments touted by President Bush and congressional Republicans that tax cuts for the very rich would spur economic growth and create jobs, let alone pay for themselves. History has proven that the strong economic growth and job creation Republicans promised from the 2001 and 2003 tax cuts did not materialize. Under President Bush's tax agenda, America suffered its weakest economic expansion since World War II, with no net private sector job creation. In fact, President Bush's economic policies resulted in a net loss of private sector jobs during the eight years he served in office.
Still, in the face of these facts about economic growth and the need to address staggering federal deficits, Republicans argue that nothing short of an unpaid for, full extension of expiring tax cuts at all income levels is necessary. As the famous saying goes, "They are entitled to their own opinion, but not to their own facts."
According to the nonpartisan congressional Joint Committee on Taxation, extending the tax cuts for families making more than $250,000 would add $38 billion to the federal deficit next year alone. Of that amount a full $32.7 billion would flow to 315,000 American families making more than $1 million per year and provide each of these families with an average tax cut of $103,835.
The entire cost of providing these cuts to families with income over $250,000 would be borne by future generations in the form of higher taxes or reductions in important federal programs like Social Security, which would likely have a disproportionate effect on middle-class families. You don't have to take my word for it; listen to Glenn Hubbard, a former Bush administration official who was an architect of the 2001 and 2003 tax policies, who said, "Deficits are just future taxes."
Some Republicans argue that extending tax cuts for the wealthiest would help small businesses. Again, the facts refute the rhetoric. The joint tax committee estimates that 97 percent of individuals operating small businesses would be covered through Democrats' plans to target tax relief at the middle class.
Democrats support business tax relief that will help grow and create jobs, and we target this relief where it is needed. House Democrats have passed measures to help incentivize investments in small businesses by excluding individual stock purchases from capital gains, to ease lending to small businesses still reeling from the recession, and to further reduce the burden of paperwork on small business owners to help them focus on running their shops and turning a profit. These measures are being held hostage by a Republican filibuster threat in the Senate, and I join President Obama in calling on Senate Republicans to end their stalling and work with us to keep our economic recovery moving forward.
Democrats in Congress, working with the Obama administration, will continue vital tax relief for middle-class families and restore fiscal responsibility. This is fair and keeps money in the pockets of folks who have borne the brunt of the recession and who will invest that money back into our economy, helping our businesses grow and create jobs.
Read why all of Bush's tax cuts should be extended, by Chuck Grassley, a Republican senator from Iowa, ranking member and former chairman of the Senate Finance Committee.