House Republican leaders came out against nearly all the major proposals in President Obama’s $447 billion job-creation plan Friday, including his middle-class tax cuts and his approach to federal spending on transportation and school construction.
In a memo to all House Republicans, the GOP leaders said cutting payroll taxes through 2012 would lead to a tax increase in 2013 — an argument that didn’t deter Republicans from a much bigger, 10-year tax cut in 2001 that was extended last December but is set to expire on Dec. 31, 2012.
“There may be significant unforeseen downsides to large temporary tax cuts immediately followed by large tax increases,” they wrote. “We are creating significant new uncertainty in an already uncertain economy.”
The GOP leaders — House Speaker John Boehner, Majority Leader Eric Cantor, Majority Whip Kevin McCarthy and GOP Conference Chairman Jeb Hensarling — couched their criticisms in bipartisan prose by saying they are open to negotiating with the White House in some instances.
But their proffered areas of potential agreement were minor compared to those in which the two sides disagree. The latter category includes:
Cutting payroll taxes in half in 2012 for workers and small businesses.
Raising taxes to pay for the plan. The GOP leaders said limiting tax deductions for upper-income people, Obama’s biggest revenue-raiser, would reduce their charitable contributions.
Spending $30 billion on school repairs, thereby generating construction jobs. The leaders said schools are the responsibility of states and localities.
Spending $50 billion on transportation repairs. The leaders said they are negotiable but would rather simply extend the main federal highway bill — one which they have argued should be reduced by 30% from prior levels.
Giving $35 billion to states so that teachers, police and firefighters can be rehired. The leaders said a $54 billion payout in 2009 was misused in some states, masking over their fiscal problems.
“To be clear, we don’t agree with portions of President Obama’s proposal, and Republicans have a different vision for the steps that need to be taken to help our economy get back to creating jobs,” the foursome wrote.
“We are, however, committed to passing legislation to implement the policies in the areas where agreement can be found to support job creation and long-term economic growth.”