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Democrats’ Dangerous Game on Defense Cuts
NRCC | October 24, 2012

Democrats’ Dangerous Game on Defense Cuts

President Obama and His Fellow Democrats Are Still Vowing to Use Job-Destroying Defense Cuts As a “Weapon” to Extract Job-Destroying Tax Hikes

  • In Monday’s presidential debate, President Obama once again vowed that devastating defense cuts “will not happen,” just the latest instance of Democrats trying to distract from the impact of their job-destroying policies beyond the election.

  • The fact is Democrats have been threatening to use these pending defense cuts, projected to destroy millions of jobs, as a political “weapon” so they can raise taxes to keep spending money.

  • Meanwhile, these tax hikes on small businesses that Democrats want so desperately are projected to destroy hundreds of thousands of jobs.

In Monday’s presidential debate, President Obama once again vowed that devastating defense cuts “will not happen,” just the latest instance of Democrats trying to distract from the impact of their job-destroying policies beyond the election:

OBAMA: “THE SEQUESTER IS NOT SOMETHING THAT I PROPOSED… IT WILL NOT HAPPEN”:  First of all, the sequester is not something that I proposed.  It’s something that Congress has proposed.  It will not happen.  The budget that we’re talking about is not reducing our military spending, it’s maintaining it.” (“Remarks by the President and Governor Romney in the Third Presidential Debate,” The White House, 10/23/2012)

FACT-CHECK: “CLEAR THAT THE IDEA FOR THE DRACONIAN [DEFENSE] CUTS ORIGINATED IN THE WHITE HOUSE—AND NOT IN CONGRESS”: “A forthcoming book could give new ammunition to Republican hawks eager to blame the Obama administration for looming, across-the-board cuts to the defense budget. The book ‘The Price of Politics,’ by Washington Post Associate Editor Bob Woodward, makes it clear the idea for the draconian spending cuts originated in the White House – and not in Congress.” (Austin Wright, “Bob Woodward Book Could Bolster Republican Attack on W.H.,” Politico, 9/7/2012)

NOT THE FIRST TIME WHITE HOUSE HAS DOWNPLAYED SEQUESTER: “WHITE HOUSE TO CONTRACTORS: HOLD OFF ON LAYOFF WARNINGS”: (Jeanne Sahadi, “White House to Contractors: Hold Off on Layoff Warnings,” CNN, 9/28/2012)

OBAMA ADMINISTRATION “SAID IT WOULD COVER LEGAL COSTS” IF CONTRACTORS HAVE TO FIRE WORKERS AND ARE SUED FOR BREAKING THE LAW: (Jeanne Sahadi, “White House to Contractors: Hold Off on Layoff Warnings,” CNN, 9/28/2012)

IN OTHER WORDS, THE OBAMA ADMINISTRATION WANTS TO LET COMPANIES FIRE WORKERS WITHOUT WARNING AND WILL HAVE TAXPAYERS PICK UP THE LEGAL FEES: (Jeanne Sahadi, “White House to Contractors: Hold Off on Layoff Warnings,” CNN, 9/28/2012)

POLITICAL MOTIVE? COULD HAVE BEEN “RASH OF LAYOFF NOTICES SPOOKING EMPLOYEES RIGHT BEFORE ELECTION DAY”: “Defense contractors in particular have warned for months that the upcoming sequester would cost jobs in their industry. And Lockheed Martin’s CEO has said publicly he may be forced to issue notice this fall of possible layoffs in 2013. If other contractors follow suit, there could be a rash of layoff notices spooking employees right before Election Day.” (Jeanne Sahadi, “White House to Contractors: Hold Off on Layoff Warnings,” CNN, 9/28/2012)

The fact is Democrats have been threatening to use these pending defense cuts, projected to destroy millions of jobs, as a political “weapon” so they can raise taxes to keep spending money:

NO. 2 SENATE DEMOCRAT: TAX HIKES AND CUTS TO DEFENSE ARE A LOADED “WEAPON”: “Democrats believe Republicans might be willing to compromise once the spending cuts and tax increases are felt.

“‘That may be the only way to bring some Republicans into a position of talking,’ Sen. Richard J. Durbin of Illinois, the assistant Democratic leader, said late last week. ‘We’re not going to unload our weapons at this point.’” (Lisa Mascaro, “Congressional Democrats Dig In on Fiscal Cliff Scenario,” Los Angeles Times, 7/16/2012)

“DEMOCRATS THREATEN TO GO OVER ‘FISCAL CLIFF’ IF GOP FAILS TO RAISE TAXES”: (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

“SENIOR DEMOCRATS” ARE READY TO “PLUNGE THE NATION BACK INTO RECESSION” IF THEY DON’T GET THE TAX HIKES THEY WANT: (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

BUT MILLIONS OF JOBS ARE ON THE LINE:

FEDERAL RESERVE CHAIRMAN BEN BERNANKE: IF DEMS GET THEIR WAY “RECESSION WOULD OCCUR EARLY NEXT YEAR”: “The Congressional Budget Office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect–a scenario widely referred to as the fiscal cliff–a shallow recession would occur early next year…”(Bernanke testimony before the Senate Banking Committee, Federal Reserve Web site, 7/17/2012)

NATIONAL ASSOCATION OF MANUFACTURERS: 3.44 MILLION JOBS COULD DESTROYED BY SEQUESTER FROM 2012 – 2022: (“Defense Spending Cuts: The Impact on Economic Activity and Jobs,” National Association of Manufacturers, Accessed 7/18/2012)

STUDY: UP TO 10 MILLION JOBS COULD BE LOST FROM DEMS’ DISASTROUS PLAN: The negative fiscal shock exceeds Gross Domestic Product (GDP) growth in any year over the past two decades, and when considering economic multipliers, the contraction could approach ten percent, which would amount to the biggest year-to-year decline since 1932. This upper-bound estimate would result in a loss of 10 million jobs, according to the administration’s methods.(“New Study Examines Economic Effects of the Fiscal Cliff,” American Action Forum, 7/17/2012)

Meanwhile, these tax hikes on small businesses that Democrats want so desperately are projected to destroy hundreds of thousands of jobs:

710,000 JOBS COULD BE DESTROYED BY DEMOCRATS’ TAX HIKE PLAN: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

1.8% DROP IN WAGES: “Real after-tax wages would fall by 1.8%, reflecting a decline in workers’ living standards relative to what would have occurred otherwise.” (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012)

JOINT COMMITTEE ON TAXATION: 940,000 SMALL BUSINESSES TO GET HIT BY DEMOCRATS’ LATEST TAX HIKE: “Congress’s Joint Tax Committee—not a conservative outfit—estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama’s tax increase threshold.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

TAX HIKE WOULD BE A $201 BILLION HIT TO THE ECONOMY: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

MORE THAN HALF OF NET BUSINESS INCOME WILL BE HIT BY HIGHER TAX RATES UNDER OBAMA PROPOSAL: “And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates. This is because millions of businesses report their income as sole proprietors and subchapter S corporations that file under the individual tax code.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)  

OBAMA’S NEW TAX HIKE WOULD HAVE SOME SMALL BUSINESSES PAYING HIGHER TAX RATES THAN GENERAL ELECTRIC AND J.P. MORGAN: “So Mr. Obama wants these businesses to pay higher tax rates than the giant likes of General Electric or J.P. Morgan. Does that qualify as ‘tax fairness’?” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

TAXMAGEDDON WILL COST AVERAGE FAMILY $4,138 IN 2013: (“Taxmageddon Costs Average Family $4,138 Next year,” The Heritage Foundation, 6/14/2012)

Democrats’ Dangerous Game on Defense Cuts http://ow.ly/eI8mE

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