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is it with Republicans that every time they get in a closed-door
smoke-filled room negotiation with Democrats, they always emerge
having lost their shirts.
This year’s
“economic stimulus summit” unfortunately fits the pattern of every
“bipartisan deal” the GOP has negotiated with congressional Democrats
since Reagan was in the White House and was promised “$3 of spending
cuts for every $1 of new taxes” as part of the infamous TEFRA fight
of 1982. Carrying on the tradition, George Bush Sr. held a bipartisan
summit in 1990 with George Mitchell and Senate Democrats at Andrews
Air Force Base, and signed away his no-new-taxes pledge and his
presidency.
The Republican
party should pass a resolution at its next convention outlawing
“bipartisan summits.”
Until then,
the bipartisan deal between George W. Bush and Senator Daschle must
be stopped before it does real damage to the economy and the Republican
party. Bush is this close to agreeing to a $100 billion deal that
is long on social-welfare spending and woefully weak on supply-side
tax-cut stimulus.
Out of the
deal now taking shape, the Democrats get $30 billion for unemployment
insurance and taxpayer-subsidized health insurance, more money for
“infrastructure” spending for white elephant projects like Amtrak,
and funding for an inane tax-rebate scheme for people who don’t
pay income taxes. All of these things will hurt the economy and
add to the unemployment lines.
The Republicans
get . . . well, nothing really: No reduction in the income-tax rates,
except for an insultingly trivial chopping of the 27% rate all the
way down to 25% rate. (The Democrats even fought that cut.) The
highest and most economically punitive tax rates remain cemented
in place — at Tom Daschle’s insistence. And there's no reduction
in the capital gains tax. Sorry, that was left on the cutting board
table.
What about
the unfair corporate alternative tax? Has that been terminated once
and for all? Nope. That will live on. Was the death tax repealed?
Dream on. Daschle vetoed every pro-growth idea, and the GOP capitulated
at every turn.
This deal
looks like the houses in Whoville after the Grinch has stolen Christmas.
Daschle even greedily stashed away the crumbs on the floor. It makes
you want to go up to the White House negotiators and smack them
and ask, "What in the world were you thinking?"
Here’s my
simple advice to the president: Walk away. Save yourself from this
insanity while you still can. There’s no shame in stepping back
from the table when your adversary isn’t negotiating in good faith.
There’s still time to start over and get it right.
If we must
have a bipartisan plan, fine. Here’s how to do it. The package is
$100 billion. Daschle gets $50 billion. Republicans get $50 billion.
Under this deal, the Dems are free to do whatever they want with
their $50 billion. They can build a 500-foot monument to Karl Marx
and put in the town square in Sioux Falls, South Dakota. They can
purchase postage stamps. They can buy pardons for convicted felons.
They can make reparation payments to eighth-generation descendants
of the slaves. They can spend the money on new Amtrak trains laced
in silver and gold. They can stuff the dollars in suit cases and
ship it off to big town mayors. Nothing can be nuttier than the
stimulus bill that Daschle has already proposed.
But . . .
the Republicans get to do whatever they want with their half. With
$50 billion, they could actually do some real good for the economy.
I would start by cutting the capital-gains tax in half, if only
because this is a freebie — it doesn’t cost any money and may
even raise funds. (The last capital-gains cut doubled revenues.)
Then I would cut all the personal income-tax rates immediately.
This would leave enough money left over to buy out Paul O’Neill’s
contract as Treasury Secretary.
These measures
would do enough good to counteract the negative impact of what the
Democrats would do with their half, and still provide a real
shot of adrenaline into the economy in 2002.
If the Democrats
reject this olive branch, then I’m with Arthur Laffer and the folks
at the National Taxpayers Union. The current “stimulus” plan is
a lot worse than doing nothing at all.
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