Chandler Blames Federal Deficit on Bush-Era Tax Cuts

by Dan Conti, Kentucky Public Radio

Congressman Ben Chandler says one of the main causes of today’s historic trillion dollar federal budget deficit is the tax cuts that were approved during the Bush Administration. The Versailles Democrat made the comment during an interview on KET’s One to One program.

Chandler says tax policy under President Clinton produced a budget surplus but the lower rates championed by President Bush mostly benefited the rich.

“These were the largest tax cuts that we’ve had, maybe ever, but certainly in a very long time,” he said. “And they are a tremendous cause of the deficits that we’re looking at right now. And most of those tax cuts went to the very wealthiest people in this country.”

Chandler says wealthy people today have more money as a percentage of the economy than they’ve ever had in the history of the U.S.

“It’s kept us from having the ability to properly fund things like Medicare and Social Security,” he said. “So now people want to come along and say, ‘surprisingly, we don’t have the money to fund Medicare and Social Security.’ Well, of course we don’t. We’ve given all these big tax cuts to the wealthiest people in the country.

Chandler says he doesn’t like to hear programs like Social Security and Medicare referred to as “entitlements”. He says most recipients paid into those programs all their lives and earned the benefits.

Republicans argue that raising taxes on the wealthy will discourage investment in new economic development projects.

Local News

Clark County Commissioners Defer to Council

Clark County, Indiana is relying on a lawsuit to help close its $1.2 million budget deficit. The council will decide on Monday how it wants to save the county from default.

Clark County cut property tax 25 percent in 2007 when the county had a budget surplus. Now, it’s filed suit to ask for around $3 million back.

“Almost every count will run in the red at some time or another and right now we are in the red. That happens quite frequently throughout the state,” said Kevin Vissing, president of the Clark County Council.

The county is relying on property tax and the pending lawsuit to help solve its problems.

“If the lawsuit doesn’t work out we’re likely to come up short. If it does work out we’re likely to make ends meet,” said Vissing.

Pressure from the county commissioners requested the council to come up with a solution that would prevent around 200 layoffs. Vissing said the council is likely to request borrowing money at Monday’s meeting.

The council tried suing the Department of Local Government Financing once before for over $7 million dollars. That amount was rejected.

Click here to see a copy of resolution.

Local News

State Revenue Forecasts Due Out Tomorrow

From Kentucky Public Radio’s Tony McVeigh

Some new state revenue forecasts on which a special session of the Kentucky General Assembly may be based will be announced today in Frankfort.

Last week, the Consensus Forecasting Group took a look at the leading economic indicators, which were generally gloomy. Now, the independent panel of economic experts will crunch the numbers and come up with new revenue forecasts for the next fiscal year and beyond.

Governor Beshear will use the numbers to determine the need for a special session.

“Well, certainly as we move along, and as we get the Consensus Forecasting Group’s numbers, I’ll be further discussing where we go and those discussions, obviously, will include legislative leadership,” says Beshear.

The Governor believes the state could be facing a deficit topping one-billion dollars in the fiscal year that begins July 1st.

Larry Lynch, chairman of the Consensus Forecasting Group, says the governor’s projections “seem plausible.”