National Catholic Reporter
The Independent Newsweekly
Issue Date:  April 25, 2003

Standing up to tax cut charlatans

There are a lot of Americans, Democrats among them, who should be standing up cheering for two Republicans right about now.

They are Sens. Olympia J. Snowe of Maine and George V. Voinovich of Ohio, who, under enormous pressure from their party leaders (and along with Democrats in the Senate) stood firm and reduced the latest push for irresponsible tax cuts by more than half.

What is at stake here, for those who believe that federally funded programs play a vital role in promoting the general welfare, is nothing less than starving Washington of the revenues necessary to do that job.

First, an essential flashback.

There was a time when Republicans worried about fiscal restraint. The Robert Taft-Dwight Eisenhower-Bob Dole-Jerry Ford-George Bush I-lineage (like Snowe and Voinovich today) argued that government revenues and expenditures should be roughly in balance.

Right-wingers termed these fiscal restrainers “Dime Store Democrats,” by which they meant that those who favored balanced budgets did so for unprincipled reasons -- they’d spend a dime to the Democrats’ dollar without challenging the underlying reason for the program.

For all the faults of the fiscal conservative approach, it had its appeal: It was responsible and rational. But, alas, boring. No pizzazz.

Times have changed. Today, the Republican Party’s answer to almost anything that ails us at home (what they’ve got planned abroad is a different story) is straightforward: tax cuts. And then more tax cuts.

Back in January, the president proposed new tax cuts totaling $726 billion over 10 years -- this on top of the $1.6 trillion passed by Congress in 2001. The Senate whittled the latest proposal down to $350 billion, while the House settled on $550 billion. The differences will be worked out over the next few months.

What does $550 billion look like? It could fund Medicare for a year, provide increased daycare benefits to moms on welfare making the mandatory transition to work, fully fund the Environmental Protection Agency and the Department of Homeland Security, it could do all of that in one year and still leave more than $250 billion for deficit reduction. It is a lot of money.

These tax cuts and the resulting deficits are needed, says the administration, to get the economy out of its slump (private sector payrolls are down 2.6 million jobs since March 2001). It is a pathetic assertion.

The arguments against the administration’s tax plans are, by now, well known. The Fiscal Year 2004 deficit (once the costs of the war in Iraq are calculated) will exceed $400 billion -- the largest in the nation’s history. Over the next 10 years, the federal debt is scheduled to grow by more than $3 trillion.

In addition to the adverse economic consequences of this policy (rising interest rates and reduced economic growth, not to mention the wasteful spending necessary to pay interest on the national debt), the relative dearth of funds means it will be next to impossible for the federal government to invest in needed spending for housing and health care, education, and domestic security (remember the war on terrorism?)

Short-term deficits, properly constructed, can be a boon to an ailing economy. Provide a tax cut to a working family getting by month-to-month and they’ll spend it to buy that needed new car or clothes for the kids, generating economic activity. Or spend money to build a road or a school today, and you’ve got a productive resource for the future, an asset that will continue to pay economic dividends even as its construction provides employment to today’s jobless.

But this is not what the Bush plan is about. By targeting the wealthiest among us for additional benefits it will do little to encourage growth, even as its long-term consequences undermine our ability to carry out essential government functions.

The push for additional tax cuts is not primarily about policy; no, it’s taken on almost a religious fervor, a cult-like aura. If only we believe, then our problems will be solved.

Snowe and Voinovich deserve credit for standing up to the charlatans peddling tax cuts as a panacea; Democrats should take the argument a step further and fight vigorously to reduce these cuts even more. It’s an argument they can win.

“Dance with the one who brung you,” is an old political aphorism. George W. Bush is doing just that. He came to Washington supported by those who would mortgage the future for the benefit of the few over the many. And that’s the way -- in two years or six -- he’s planning to leave.

National Catholic Reporter, April 25, 2003

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