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Tax Law Makes Mockery of Deficit: Rep. Frank

Barney Frank
AP
Barney Frank

Rep. Barney Frank, chairman of the Financial Services Committee, told CNBC that the tax bill signed into law Friday by President Obama makes a “mockery of all this deficit concern.”

Frankvoted against the so-called tax compromise between Obama and Congressional Republicans, which retained tax cuts for the wealthiest Americans, along with all other Americans.

“The way they made the deal was that each one added to the deficit,” said Frank, who is a Democrat from Massachusetts and the co-author of the financial reform lawapproved earlier this year.

“Nobody ever thought about an offset. I don’t understand how you can, at the same time, say that the deficit is your No. 1 priority and pile more and more debt on without a thought about what’s going to happen.”

Other points of the law that Frank opposes are reducing the Social Security payroll tax without replacing it. “What I’m afraid of,” he said, “is that this will be used a year from now as an argument to further reduce Social Security benefits.”

He maintained that under President Clinton tax rates for top earners went up to 39 percent with “no negative economic impact.”

“Again, it goes back to the deficit,” he added.

“I don’t understand why I’m told we can’t afford to help cities keep firefighters and police officers on the streets, why we can’t do environmental cleanup and fix badly tattered bridges, but we can afford hundreds of billions of dollars in these tax reductions with no concern about an offset.”