NBC's Andrea Mitchell Hits Democrat From the Left on Bush Tax Cuts

On the Wednesday edition of her self-titled MSNBC show, Andrea Mitchell actually hit a Democratic Senator from the left on tax cuts. Democratic Indiana Senator Evan Bayh appeared on Andrea Mitchell Reports to offer his support to extending the Bush tax cuts as a way to stimulate the economy but a skeptical Mitchell pressed: "Senator, given the deficit and the wealth of the upper class, and the fact that they sit on their money and put it into savings, why give them this tax break?" Bayh went on to tell the NBC correspondent that raising taxes "will lower consumer demand at a time we want people putting more money into the economy" and pointed out "the people you're referring to, in those upper brackets, are the ones that make decision about hiring and making investments."

The undeterred Mitchell responded with the Obama administration line that "you should extend the tax cuts for the middle class but not for people making more than $250,000 a year." Bayh, delivering a basic economics lesson, reminded Mitchell that while "middle class taxpayers are using the extra money to pay down debt, credit card bills, mortgages, things like that...It's the people in the upper brackets who continue to spend at a higher rate, propping up consumer demand" and insisted "If we want people to hire more individuals, if we want them to make business investments, raising burdens on them probably doesn't improve their optimism, confidence and discourages rather than encourages them to do those kinds of things." However, Bayh did relent when he offered to Mitchell that eventually the tax rates "are probably going to have to go up but it ought to be as part of a comprehensive deficit reduction package."

The following exchange was aired on the August 4 edition of MSNBC's Andrea Mitchell Reports:

ANDREA MITCHELL: July's official unemployment numbers due out Friday but an independent study says that the U.S. economy added only 42,000 private sector jobs last month. That is sluggish. That sluggish growth and the overall weak economy has Republicans and even some Democrats rallying against letting any of the Bush tax cuts expire, including the ones for the upper class. And joining us now Democratic Senator Evan Bayh, one of those Democrats that serves on the Banking and Small Business committees . Senator, given the deficit and the wealth of the upper class, and the fact that they sit on their money and put it into savings, why give them this tax break?

SEN. EVAN BAYH: Well, a couple of things, Andrea. First, as you noted, the economy is very weak right now. And raising taxes will lower consumer demand at a time we want people putting more money into the economy. Secondly, the people you're referring to, in those upper brackets, are the ones that make decisions about hiring and about making investments. We want them to do more of that, and so raising burdens on them during a time like this is just not the right thing to do. Now once the economy has a head of momentum under it, a self-sustaining recovery, we're adding jobs, not the forty-some thousand you mentioned, but more than 100,000 - 200,000 every month then we can pivot and look at deficit reduction. Because in the long run I share that, the concern about that. But right now we want to emphasize growth and getting the economy moving and then pivot and get the deficit down.

MITCHELL: Well what do you say to the White House and their position is that you should extend the tax cuts for the middle class but not for people making more than $250,000 a year.

BAYH: Well, a couple of things. There's some evidence that's come out recently that middle class taxpayers are using the extra money to pay down debt, credit card bills, mortgages, things like that. That's a good thing to do but it doesn't stimulate the economy. It's the people in the upper brackets who continue to spend at a higher rate, propping up consumer demand. And then there's the point that I mentioned. If we want people to hire more individuals, if we want them to make business investments, raising burdens on them probably doesn't improve their optimism, confidence and discourages rather than encourages them to do those kinds of things. And the final point that I make, Andrea is, eventually those rates are probably going to have to go up but it ought to be as part of a comprehensive deficit reduction package combined with spending enforceable spending restraint. To just go out and raise taxes with no spending restraint, particularly during a recession, it's just not the right time to do that.

MITCHELL: Well at this stage, as you're leaving the Senate. You don't have to worry about the political fallout in, in the midterm elections, but are your colleagues going to go along, your Democratic colleagues, go along with extending the tax breaks for the, for the rich?

BAYH: No, the vast majority of them won't. I suspect that there will be three or four or five of us who have qualms about that. But I won't identify the member but someone who you would quickly recognize as a very liberal member of the caucus yesterday was speaking up about she happened to believe that raising taxes on anyone making less than $8 million a year, at this moment, was not the right thing to do. So even some of the more liberal

MITCHELL: Eight million?!

BAYH: No, no $1 million. I'm sorry, $1 million.

MITCHELL: Okay.

BAYH: I should enunciate more clearly. $1 million a year was not the right thing to do. So this debate has a ways to go. We need to do two things in sequence. Number one, err on the side of more stimulus for the economy, getting it moving. That means not raising taxes right now when it's very sluggish as you pointed out. And then a real focus on deficit reduction starting with spending restraint. And then if we have to raise revenue, which in all likelihood we probably will, focusing on the people who are in the position to help us do that best but not now.

MITCHELL: Evan Bayh from the Senate. Thank you very much.

Geoffrey Dickens
Geoffrey Dickens
Geoffrey Dickens is the Deputy Research Director at the Media Research Center.