Opinion

‘Stop All the Bad Stuff’

Photo of Larry Kudlow
Larry Kudlow
Senior Contributor, CNBC

At a small, informal breakfast in Midtown New York Tuesday morning, House Republican leader John Boehner said the lame-duck Congress, scheduled roughly for November 15 through December 22, will pass a bill that extends all the Bush tax cuts. And he said President Obama will not veto that bill.

Boehner reminded the breakfast group that George Stephanopoulos asked Obama many times in a recent Good Morning America interview whether he would veto an extension of the full Bush tax-cut program. And not once did Obama answer the question.

That’s a shrewd point by Mr. Boehner. It harkens back to Obama’s last full White House press conference, when the president also dodged a question about vetoing a full extension of the tax cuts.

In practical terms, Boehner expects this lame-duck tax-cut bill will be part of an omnibus appropriations bill to fund the government. (There is no FY2011 budget.) He felt an omnibus bill would be better than a continuing resolution. In effect, it would be a mini reconciliation package — and a pro-growth package at that.

Boehner also made it clear that he was unhappy with the 99 Republicans who just voted — along with most Democrats — to pass the China trade-and-currency-protection bill. He basically said, “No, we must not go in that direction.” And he believes the bill will come to nothing, in particular under Republican leadership.

Boehner understands that such a bill would take a toll on middle- and lower-income people. Indeed, a massive price increase on Chinese imports brought on by protectionist tariffs, or a whopping hike in the value of the Chinese yuan, would slam all the folks who shop at Wal-Mart and Dollar General.

John Boehner himself has a strong free-trade record, and he grasps the need for a stable dollar. When asked about the plunging dollar during the 2000s, and how higher interest rates and inflation subverted the Bush tax cuts, he nodded in agreement. Boehner seems to get it.

More generally, the Republican leader is focused on stopping any regulatory, tax, and trade barriers to job creation. When asked about the main agenda point for a GOP Congress, Boehner said, “Stop all the bad stuff.”

I like it. Stop all the bad stuff.

So after the breakfast I got to thinking about the economy and a couple of front-page stories in the New York Times and the Wall Street Journal about the huge corporate-profits comeback and the incredibly strong financial position of American business. True enough, while firms have been stockpiling cash and making money hand over fist, and while they have yet to hire new workers or invest in new projects in earnest, the financial-health numbers are very impressive.

After-tax profits through the second quarter are up $1.2 trillion, marking the third-highest profits share of the economy since 1947. The cash hoard runs around $2 trillion, about half of which is overseas. It’s actually cheaper for firms to borrow and refinance their debt at rock-bottom interest rates than to pay the 35 percent tax rate on repatriating foreign earnings. Here’s an idea: How about a 5 percent tax holiday to bring those foreign earnings back home?

  • murrayabraham

    And how about stopping the nonsense and say the truth, namely that fiscal responsibility ultimately means cutting spending AND raising taxes. We can’t do it now except letting the tax cuts expire for the very rich as Warren Buffet suggests.

    http://money.cnn.com/video/news/2010/10/05/f_mpw_buffett_taxes.fortune/

  • binklee06

    Mortgage rates are historically low you can easily refinance these days your mortgage to 3%. It is the best way to save money. Google “123 Mortgage Refinance” to get 3% refinance and instant quote for your mortgage

  • JoeJ

    At a small, informal breakfast in Midtown New York Tuesday morning, House Republican leader John Boehner said

    Sorry but this does not make me feel at all good – why is the future speaker of the house sucking up to the 1% – while he pretends to be the representative to 99% of we Americans.

    In the last ten years the 1% have gotten richer and richer at the expense of the 99%. Those are the ugly facts! Big money and their self generated bobbles are killing America.

    The truth is that the 1%, support the Democrats – why is a Republican kissing their ass?

    The base of the Republican Party are middle class folks with middle class money and middle class values – when are they going to turn to us – not the supper rich?

    Boehner needs to proffer measures that support ONLY middle class existence and well being — the money sloshing around in the hands of the supper rich will follow.