Earlier this week, President Barack Obama held a rally down in Fairfax County. The visit by the leader of the free world was probably a benefit to the area’s first-term congressman, Rep. Gerry Connolly (D), who is prepared to march in lock-step with the president's agenda. Right?
Wait? Connolly and Obama disagree on something? I thought with primary season over, we could get past these intra-party divisions. Sigh.
Connolly is facing a tough challenge from businessman Keith Fimian, who he beat in 2008 to take over for retiring Rep. Thomas Davis (R) in Virginia’s 11th District, which includes all of Fairfax City and parts of Fairfax and Prince William counties. As of 2006, the 11th District was the nation’s wealthiest.
That probably has something to do with why Connolly is opposing the president's proposal to roll back the Bush tax cuts on families making more than $250,000 a year or individuals with incomes above $200,000 a year. (The cuts are scheduled to expire at the end of the year. The president wants to extend the cuts for lower- and middle-income earners while letting these cuts expire.) On the day of Obama's visit, he distanced himself from the proposal.
He was more explicit when talking to WUSA, saying: "Now is not the time to be raising taxes on any income group."
Other Democrats who want to delay or stop the rollback of the Bush tax cuts have made the same claim about how the rich are spending a lot more than the rest of us. Is it true?
The earliest mention of Connolly's 5-30 statistic we could find was from an Aug. 5 Wall Street Journal blog post:
According to new research from Moody’s Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.
By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.
When Grant Herring, a spokesman for Connolly, returned our call, he pointed us here as well.
This doesn't match up exactly with Connolly's statement, though. It's 37 percent instead of 30 percent, and includes more than just consumer spending.
Still, it backs up Connolly's general point — America's uber-rich are, for the moment, spending a lot more than the average citizen. (Since they have more money, it's only logical that they would spend more, but a Moody's economist said this level of spending was "unusually high.")
An entirely separate but related question is whether or not this justifies keeping the tax cuts in place. A report released by Moody's Analytics — the same group whose statistic Connolly cites — earlier this week explains that the wealthy generally saved the extra income they received when the tax cuts passed rather then spent it.
We asked Connolly's office for a response, and e-mailed them the relevant article. We haven't heard back yet, and will update this post if we do.
Connolly didn't get his numbers exactly right, but he's Mostly On Point when arguing that his constituents are stimulating the economy a bit more than the average citizen.