Yesterday, House Minority Leader John Boehner (R-OH) unveiled his own version of an economic recovery package, one that attempts to draw a contrast with the proposal favored by House Democrats:
Boehner’s plan, some components of which are also proposed by Republican ...
Boehner’s plan, some components of which are also proposed by Republican presidential nominee Sen. John McCain (Ariz.), would double the child tax credit to $2,000 per child, cut the corporate tax rate from 35 percent to 25 percent, zero out capital gains taxes for equities over the next two years, and encourage American companies to purchase new equipment through deductions. He also wants Congress to focus on investing in energy independence initiatives that could create jobs
On one hand, we have a Democratic proposal -- supported by Fed Chairman Ben Bernanke -- that would extend unemployment insurance benefits, invest in transportation and infrastructure, provide a new round of tax rebate checks for working and middle class Americans, and deliver urgent aid to state governments (like Illinois) who are getting crushed under the weight of a global recession. Boehner counters with what the Wonk Room's Pat Garafalo calls "a conservative tax cut wish list."
As the Economic Policy Institute's handy graph illustrates, it's pretty clear which plan serves its intended purpose.
Four of the Democrats' major proposals would each provide more than $1.30 of economic value per dollar invested. The major GOP planks wouldn't stimulate anything, generating less than $.40 per dollar invested. That's because their plan doen't focus on providing relief for the poor, who would spend the money immediately if given the opportunity. Nor do they provide aid to the states, which will be forced to cut back spending without some assistance, thus weakening the package's effect. Instead, the trickle down tax cuts are directed primarily at the wealthy, who will ostensibly stash it away. It's not rocket science.
Nonetheless, we wonder what the Illinois Republican congressional delegation thinks of Boehner's proposal.
(H/T Ezra Klein)