MoveOn.org – Obama Budget, Radio Ad, 0:60 Seconds

VOICEOVER:
It’s what’s wrong with Wall Street and Washington. AIG executives get millions in bonuses after running their company into the ground. And we get to pay for it.
That’s not all. With the Bush tax cuts for the wealthy still in place, hedge fund managers and executives at firms like A.I.G. will get millions more in tax loopholes this year. There is a better way. President Obama’s new budget will make Wall Street pay its fair share and use the savings to invest in energy, education, and health care to help get our economy moving again.
Wall Street firms oppose it. But given their recent track record, that’s a good sign.
Call Representative McIntyre at (202) 224-3121 and tell him to vote for the Obama budget. We’ve tried it Wall Street’s way long enough. It’s time Washington listens to the rest of us.
Paid for by Moveon.org Political Action, pol.moveon.org, not authorized by any candidate or candidate's committee, Moveon.org Political Action is responsible for the content of this advertising. / DOCUMENTATION:
“American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.”[Wall Street Journal 3/15/09]
“The government owned 80% of [AIG], and Geithner had just orchestrated AIG's most recent handout--its fourth, if you are keeping score, for $30 billion on March 2--to prevent the teetering insurance giant from going over the cliff and taking the rest of the global financial system with it. AIG had already cost the taxpayers some $170 billion, mostly to repair the damage done by one of its units, AIGFinancial Products (AIG FP), which last year alone piled up $40 billion in losses related to its dealings in complex mortgage bond derivatives. Then Geithner's staff made the discovery that… AIG had paid out $165 million in retention bonuses to executives at the unit that compelled the U.S. to bail out the company in the first place.” [Time Magazine, 3/30/2009]
If weren’t for the Bush tax cuts, AIG executives’ $165 million in bonuses would be taxed at a higher rate. Because of the Bush cuts, however, AIG executives will keep over $7.5 million that they otherwise would have had to pay in taxes. [Center for American Progress, 3/17/09]
Obama’s budget proposal ends the era of unsustainable debt and so gets the economy moving again. By undoing Bush-era tax breaks and other awards for the ‘buyout mavens,’ the Obama budget reduces the deficit while also investing responsibly in health care and other services. “The collapse of the Bush-era economy is ample and awful evidence of the folly of unconstrained debt-fueled growth. The Obama administration has acknowledged the need for deficit spending to stimulate the economy but has vowed that unpaid-for government will not become the norm. …To combat deficits, Mr. Obama proposes to let Mr. Bush's high-end tax cuts expire in 2011, raising the top rate from 35 percent to as high as 39.6 percent. He would also impose a 20 percent rate on investment income, up from the current super-low 15 percent. And he would reinstate a tax provision enacted by the first President Bush, but undone by his son, that limited tax write-offs by high-income taxpayers for dependents and other expenses, like mortgage interest on vacation homes. The proposal also calls for taxing private equity partners just like the rest of us. Under current law, multimillionaire buyout mavens pay tax on much of their income at about the lowest rates in the tax code. Under the Obamabudget, their earnings would lose favored status and be taxed as the ordinary income of ordinary mortals… At issue is …the real-life difficulty of weaning people hooked on unsustainable debt -- whether it is unpaid-for tax breaks or over-leveraged buyouts or junk mortgages. It's a challenge avoided for too long.” [New York Times Staff Editorial, 2/27/09]
Obama’s budget finances health care, education, and energy investments by ending Bush tax cuts on the wealthiest households and closing loopholes for hedge fund managers and oil companies. It includes a national infrastructure bank, $15 billion annually for ‘clean energy technologies,’ expanded tax cuts for lower and middle income families, and a $634 billion reserve fund to expand health insurance. It also rolls back Bush’s tax cuts for individuals earning more than $200K a year and families earning more than $250K. In particular, “Hedge fund managers would take an even bigger hit. Much of their multimillion-dollar earnings would be taxed as regular income rather than capital gains, causing their tax rate to rise from 15 percent to as much as 39.6 percent.” [Washington Post, 2/27/09]
The Financial Services Roundtable opposes the budget’s proposal to end subsidies for student loan companies: “Another group that supported Obama’s stimulus plan, the Financial Services Roundtable, took aim at the president’s proposal to end subsidies for private student loan providers such as Reston, Virginia-based SLM Corp., better known as Sallie Mae, and making the federal government the sole provider of federally backed college lending.” [Bloomberg, 2/27/09]
The Financial Services Roundtable opposes the budget’s end to several itemized income tax reductions for homebuyers: “The administration recommends limitations on all itemized [income tax] deductions, including those for mortgage interest, mortgage insurance and real estate taxes. ‘While the proposal purports to target only ‘the rich,’ such a limitation would have a negative impact on all homeowners and would have a chilling effect on prospective home buyers,’ says the letter, dated March 11 and signed by the Mortgage Bankers Association, the Financial Services Roundtable, the National Association of Home Builders and the National Association of Realtors.” [Mortgage Orb, 3/13/09]
Investors and Wall Street pundits have been attacking Obama’s budget and blaming him for bringing down the Dow. This is nonsense, Dan Gross writes for Newsweek: “Investment professionals and econo-pundits claiming to speak for Wall Street have been blaming President Obama for the recent run of losses in the stock market. To their minds, investors around the world are giving a daily thumbs up or thumbs down to the administration's manifold policy initiatives. OBAMA'S RADICALISM IS KILLING THE DOW, read the headline of a Wall Street Journal op-ed by Stanford economist Michael Boskin, an official of the first Bush administration. On March 3, Strategas analyst Dan Clifton noted that ‘with the S&P 500 off close to 8.5 percent since the budget was introduced, it is clear that equity investors remain skeptical of the government's plan to lead us out of this financial crisis.’ Even CNBC's James Cramer, who supported Obama during the campaign, has turned on the president, calling him a ‘wealth destroyer.’Talk about misplaced anger. Wall Street built a wooden house, stuffed it with flammable material, set it on fire and then poured gasoline on the blaze. And now it's blaming the inferno on the arson inspector, who wasn't appointed until after the fire had reached three-alarm status?” [Newsweek, 3/23/09]

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