Rand Paul to Newsmax: Obama Will Back Down on Bush Tax Cuts

Wednesday, 25 Jul 2012 03:21 PM

By Jim Meyers and Kathleen Walter

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Sen. Rand Paul tells Newsmax that President Obama will ultimately “capitulate” and extend the Bush-era tax cuts for all Americans to improve his re-election chances and avoid a “much deeper recession.”

The Kentucky Republican also says the Supreme Court’s ruling on Obamacare will lead to a “resurgence” of the tea party as voters realize that the November election is their last chance to overturn the healthcare overhaul.

Sen. Paul, a founding member of the Tea Party Caucus, was elected in 2010. In an exclusive interview with Newsmax.TV, he discussed the Obama administration’s intention to let the Bush tax cuts expire for the wealthiest Americans.

Story continues below video.




“The bottom line is it’s a mistake to raise taxes on anybody in a recession. We’re struggling to get out of a recession. Unemployment’s still high. We’re enrolling more people right now to be disabled than we are to be employed. If we raise taxes, it’s just a big mistake for the economy.

“Even if you said, ‘Oh, we’re only going to raise taxes on three percent of the people,’ those three percent are paying 50 percent of the taxes. So it’s a mistake to raise taxes on the job creators. We all work for people that are wealthier than us and it makes no sense to punish them because ultimately that punishes the middle class and the poor.

“And ultimately, some people may lose their job. This happened a couple of years ago when we decided to tax rich people and their yachts. The people who lost their jobs were the people who made the yachts, who made about $60,000 a year. So it just doesn’t work. It’s bad economics and it’s bad public policy.”

As for the likelihood that Obama will reverse course and extend the tax cuts for everyone, Sen. Paul said: “The president has been running this campaign of vilifying those who are successful, vilifying those who create jobs, and it’s not working. His poll numbers are not coming up.

“So he’s going to sense within the next month or so that his campaign is losing ground and he may well lose. At that point, he will capitulate and he’ll extend the tax rates for everyone. It really would be good for the economy and might give him a chance of winning.

“He did this last year. He fought and fought and fought and then in the end he said, ‘In a recession’s not a good time to raise taxes on anyone.’ And he went along with extending them for a year.

“They really should be extended permanently. He beats the economy down every day that he says he’s going to go out and punish those who have been successful.”

Democrats say they won’t take action to avert automatic tax increases and spending cuts at the end of the year if Republicans won’t compromise on higher taxes for the wealthy, and critics charge that Congress is destined to drive the country off a so-called fiscal cliff.

Paul commented: “If the Democrats want to drive us over a fiscal cliff, they do it at their own peril. It would be a big mistake to raise taxes in an economy with eight percent unemployment and an economy that is growing at less than two percent. And if they want to fight that battle, we’re going to have an election in November over it.

“If they want to head us into much deeper recession by raising taxes, it’s a big mistake and we’ll decide it at the ballot box.”

Paul asserted that military spending needs to be included in cuts to the federal budget because “the biggest threat to our national security is our debt.”

Turning to Obamacare, tea party favorite Paul said: “I think the silver lining on the Supreme Court upholding Obamacare is that now our only chance [to overturn it] is at the ballot box. So I think you’re going to see a resurgence of the tea party. I think you’ll see a resurgence of the rallies around the country and I think we will be a force in the election because we realize that Obamacare is a disaster for the economy.

“We have annual deficits of over a trillion dollars and I think Obamacare will swell those deficits. We can’t even pay for our current Medicare, much less adding a new program.

“So I think the tea party will show up in force, because this is our last chance to really overturn Obamacare.”

Paul believes that GOP presidential candidate Mitt Romney will energize the tea party with his vow to grant all states a waiver on implementing Obamacare.

“It’s one of the things that he’s said throughout the campaign, that he will immediately grant waivers to all 50 states,” Paul said.

“President Obama has been granting waivers, but he’s been granting waivers to his friends, basically. So if you work for McDonalds you have a waiver. If you work for Burger King you don’t get a waiver. That’s not really, I believe, constitutional.

“I think the fact that Governor Romney is supporting [waivers] will help him get excitement and enthusiasm from the conservative base of the party.”

Asked if Romney will win the election, Paul responded: “Yeah, I think he does.

“What I see among Republicans is we’re winning the argument. The idea that you punish job creators and punish those who worked hard and are successful hasn’t changed the president’s poll numbers. You can’t punish the rich without hurting the middle class and the poor and I think people are beginning to understand that.”

In his Newsmax interview, Sen. Paul said the U.S. Postal Service may have to declare bankruptcy in order to renegotiate its overly generous labor contracts.

He also discussed a bill he has introduced to protect Americans from unwanted drone surveillance, and his efforts to cut all American aid to Pakistan if that country does not release the doctor who helped the United States find and kill Osama bin Laden.

Editor's Note: See these other exclusive Newsmax stories:

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