Jack Reed: “I oppose the tax reconciliation bill now before us. This bill illustrates the cynicism of the whole reconciliation…”

“I oppose the tax reconciliation bill now before us. This bill illustrates the cynicism of the whole reconciliation process this year, which, at the end of the day, is just a vehicle to short circuit a full Senate debate on the President's unfair tax cuts. The fiscal year 2006 budget resolution instructed the Finance Committee to report up to $70 billion of tax cuts. Only half of those tax cuts were to be offset by reconciled spending cuts, so the net effect of reconciliation would be to add to the budget deficit. In the current economic and budget environment, there is no justification for enacting tax cuts that increase the deficit and must be paid for by adding to the debt. For various reasons, the bill before us does not contain the full $70 billion of tax cuts. Most notably, it does not include provisions to extend the temporary capital gains and dividend tax cuts passed in 2003 and set to expire in 2008. It would be wise and prudent budget policy to abandon the effort to extend those debt-financed tax cuts, which go to taxpayers in the highest income brackets. But what you see is not what you are going to get. Those provisions will be back. In fact, the Majority Leader has said he will not bring a conference report to the floor that does not include an extension of the capital gains and dividend provisions. Even without any capital gains and dividend provisions, this tax bill provides benefits mainly to upper-income taxpayers.…”