Nancy Pelosi: The Tax Cut Denier
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I have been a Washington observer since the sixties, and I cannot recall anything as pitiful as Nancy Pelosi talking about the Tax Cuts and Jobs Act (TCJA). Sure, Democrats had to voice NOI (not our idea) opposition when Republicans brought the bill to the floor, but poor old Nancy just can’t let it go. On Thursday, she said, “They won the vote, but they have not won the public opinion of it.” That is odd because CBS News just reported 66 percent of American adults think the economy is good, and a February New York Times survey found 51 percent of Americans approved of the TCJA.
Still, Pelosi tries to convince voters the TCJA will make America insolvent: “The tax bill is a dark cloud over our children’s future. We want to revisit it in a way that puts the middle class first and reduces the debt.” Apparently, Nancy has not seen the latest monthly CBO report: April tax revenues of $515 billion represent a 13% increase over last year and an all-time April record. Furthermore, tax revenues in the current fiscal year (begun October 2017) are $83 billion higher than they were the year before. The increase of 4.3% is a faster rate of federal revenue growth than at any time during Obama’s last four years; however, Ms. Pelosi refuses to acknowledge economic reality.
Pelosi still clings to the June 2017 CBO gloom-and-doom prediction: a $1 trillion budget deficit in 2020. However, the CBO has now revised its forecasts upward because “underlying economic conditions have improved in some unexpected ways since June.” The CBO term “unexpected ways” is mea culpa for under-estimating the tax-cut boost. The CBO was flat wrong last June: 2018 GDP growth will be 3.3% - not 2% - and their new report now predicts 2027 GDP to be $6.1 trillion bigger than originally forecast. At least the CBO can admit past mistakes. Nancy Pelosi chooses to deny hers.
Ms. Pelosi ignores the reality of tax revenues - and also middle-class taxpayers. The CBO reports payroll taxes are up 2.8% and individual taxes are up 11.5%. These are signs of higher employment and wages. Remember that tax rates for all taxpayers went down; therefore, higher individual taxes reflect higher individual incomes. The Wall Street Journal also reports 800,000 new entrants to the labor force since the TCJA passed (those “new entrants” were previously not being reported as unemployed). The Department of Labor reported a 3.9% April jobless rate; so, why is Ms. Pelosi still so gloomy? That is hard to determine.
Pelosi publicly states, “this tax bill has nothing going for it except helping the 1 percent” (source: Bloomberg), but actual unemployment numbers disprove her claims. The jobless rates are 6.6% for black Americans and 4.8% for Hispanics (both record lows). The jobless rate is 5.9% for Americans over age 25 without high school diplomas. If 19 out of 20 high-school dropouts have jobs, should Nancy keep yammering about wealthy investors and business owners? Simple answer: no!
A recent Gallup poll found that the public thinks the tax code is more fair today that it was before the tax cuts went into effect. Fewer Americans think middle income families pay too much (only 42%) – and more Americans think upper-income families and corporations pay their fair share of taxes. Furthermore, the IBD/TIPP Quality of Life Index reached 62.7 (the highest score since 2004) and their Economic Optimism Index has averaged 54.7 since the tax cuts went into effect (Obama’s last year was just 48.6). These polls and economic data suggest Pelosi’s internal misery index is a partisan hoax.
Nancy is plenty smart and ascended politically because she knows how to sell progressive dogma.When she speaks to friendly (liberal) audiences, she promises to change the TCJA; however, when confronted with direct TCJA questions, she plays dodge ball. When a moderator recently asked her whether she would tell House Democrats to support making middle-class tax cuts permanent, Pelosi responded, “I’m not going to be here talking about things that Republicans may or may not do because we just don’t know” (source: The Hill).
If Democrats retake the House, Pelosi has promised to repeal the TCJA. In April, Pelosi spoke to Hollywood constituents in Culver City, California, where she proclaimed her first priority was repealing and replacing the TCJA as soon as Democrats retake the House in November. This makes Pelosi a very dangerous politician, living in a parallel economic universe without access to current data or factual information. She denies economic reality and has offered no details about what she would repeal and replace.
I would respect Nancy Pelosi if she admitted she was against the tax cuts before she was for the tax cuts today. Her constituents would accept her original opposition on grounds that she did not trust Donald Trump. If she were a true progressive, then she should make the corporate and middle-class tax rates permanent, because corporations overwhelmingly create America's jobs and the middle class overwhelmingly drives the consumption of goods and services. However, don’t hold your breath. Nancy has a true gift to stay on a really stupid message - and passing bills before she knows what's in them. To repeat: this makes her a very dangerous politician.