Dems claim tax cuts, GOP calls it spending in disguise 

As protesters rallied outside, Democrats and Republicans engaged in a battle over taxes in the Capitol, with Democrats claiming credit for massive tax cuts while Republicans accused them of actually raising taxes by hundreds of billions of dollars and breaking President Obama's pledge to not raise taxes on the middle class.

The first volley was fired by House Democrats, who sent a missive to reporters proclaiming they have led Congress to cut taxes by more than $800 billion.

"In the midst of the worst economic crisis since the Great Depression, Congress and the President acted swiftly to bring relief to our nation's families and businesses, and create good-paying jobs," Speaker Nancy Pelosi, D-Calif., said in a statement. "A critical element of that relief and recovery effort was tax cuts for the middle class and small business owners."

Pelosi credited the $850 billion stimulus bill, saying more than one-third of it is comprised of tax relief for the middle class.

Democrats are also touting the new health care law as a tax cut because many people will get tax credits if they purchase health insurance.


A different kind of contract for Congress

Several tea party groups held an online vote to craft a Contract from America, a grass-roots version of the Contract with America written by Republican House members in 1994. House Minority Leader John Boehner and other top Republicans quickly signed on to the document. The general demands include:

»  Protect the Constitution

»  Reject cap and trade

»  Demand a balanced budget

»  Enact fundamental tax reform

»  Restore fiscal responsibility and constitutionally limited government in Washington

»  End runaway government spending

»  Defund, repeal and replace government-run health care

»  Pass an "all-of-the-above" energy policy

»  Stop the pork

»  Stop the tax increases


Incredulous Republicans disputed the claim, saying much of what Democrats call tax cuts is actually government spending, and that the party has passed middle class tax increases and is planning more, including a potential fuel tax, a tax on those who do not purchase health insurance and a tax on expensive insurance plans.

"You know, Groucho Marx said years ago, 'Who are you going to believe, me or your own eyes?' Republican Conference Chairman Mike Pence, R-Ind., said in a floor speech. "I just have to wonder about the American people looking in this morning to hear Democrats talking about having cut taxes more than any other Congress in history."

Democrats did, in fact, provide tax relief. The Making Work Pay initiative, for instance, slashed payroll deductions this year for most income earners by $400 for individuals and $800 for couples at a cost of $116.2 billion over 10 years. They also expanded the child tax credit and the earned income credit.

"It is an empirical fact that 98 percent of working families got a tax cut this year," said Michael Linden, a tax and budget policy expert at the Center for American Progress, a liberal think tank.

But top Republicans accused Democrats of mischaracterizing the initiatives.

"Half of that is spending," said Rep. Paul Ryan, R-Wis., who is the top Republican on the Budget Committee. "Spending money on subsidizing health insurance by sending money to health insurance companies is not cutting taxes, it's spending.

Alan Reynolds, a tax expert for the Cato Institute, a libertarian think tank, said the Making Work Pay initiative does not qualify as tax relief, noting that many who qualified for the money paid no taxes in the first place.

"If you are trying to buy votes, there is nothing better than writing checks to people," said Reynolds. "And you can call it whatever you want. It's spending through the tax code."

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