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 oy, do the Democrats
hate to cut our taxes and love to spend our money. The Democrats
insist on tying cuts in
marginal
tax rates to actual surpluses. They say they're concerned about
creating large deficits if the surpluses don't materialize. Of
course, these same Democrats would never tie spending increases
and new entitlement programs to actual surpluses. In their minds,
spending increases are a fact of life unaffected totally by actual
budget and economic circumstances. They were never concerned about
deficits before — remember the New Deal, the Fair Deal, the
Great Society, and all the rest of it — but now they are budget-balancing
hawks.
Of course, the Democratic party is the party of big government.
We expect Democrats to oppose tax cuts and promote spending. But
the congressional Republicans are supposed to stand for something
different, including limited government and economic liberty. Yet,
they've bought into the Democrat argument that tax cuts must be
tied somehow to budget surpluses.
Some
Republicans, who command a lot of attention in a Senate split 50-50
between the two parties, are urging
| “Congressional
Republicans have bought into the Democrat argument that
tax cuts must be tied somehow to budget surpluses.” |
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something
they call a "trigger," whereby taxes would only be cut if budget
surpluses actually materialize. It's unclear how this would work,
but it really doesn't matter. There's already a "trigger" mechanism
that empowers members of Congress to raise taxes, if that's their
desire, whether or not a surplus exists. It's called Article I,
Section 7 of the United States Constitution. It states, in relevant
part:
Every
Bill for raising Revenue shall originate in the House of Representatives;
but the Senate may propose or concur with Amendments as on other
Bills. …The Congress shall have Power To lay and collect Taxes,
Duties, Imposts and Excises, to pay the Debts and provide for the
common Defense and general Welfare of the United States; but all
Duties, Imposts and Excises shall be uniform throughout the Unites
States…
Then there's the Sixteenth Amendment, which provides:
The
Congress shall have power to lay and collect taxes on incomes, from whatever
source derived, without apportionment among the several States,
and without regard to any census or enumeration."
Congress is not bound by any 5- or 10-year budget plan. However,
the so-called "trigger" idea is being floated for two reasons: 1.
those who support it hope to appear fiscally responsible when, in
fact, they're not; and 2. as Democrats learned after supporting
Bill Clinton's massive tax increase in 1993, there's a political
price to pay for voting to increase taxes, i.e., the Democrats lost
control of Congress for the first time in over 40 years. The liberal
Republicans, who usually support Democrat spending initiatives,
don't want to be held accountable for voting to raise taxes.
One of the most personally arrogant, yet politically timid Republicans
is House Ways and Means Committee chairman Bill Thomas. He's a
man always ready to cut the proverbial baby in half, which he and
other moderates call "the art of the possible." Last Friday, Rush
Limbaugh, citing, in part, the Wall Street Journal, criticized
Thomas, among others, for failing to follow George Bush's leadership
in cutting taxes.
Thomas responded that he had, in fact, embraced Bush's tax plan.
Thomas's bill included a retroactive reduction in the marginal tax
rate for the lowest income bracket — from 15% to 12%, for a total
tax cut of $5.7 billion this year.
Thomas is disingenuous at best. The plan Thomas refers to was offered
by Bush in December 1999. Fourteen months
| “The
liberal Republicans don't want to be held accountable
for voting to raise taxes.” |
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later, the surplus is projected to increase by $5.6 trillion, which
is $1 trillion more than when Bush first proposed his plan. Moreover,
the economy is beginning to tank. Bush himself has recognized the
need to act more swiftly. As recently as February 27, 2001, in
his speech to a joint session of Congress, Bush stated:
We
must act quickly. The Chairman of the Federal Reserve has testified
before Congress that tax cuts often come too late to stimulate
economic recovery. So I want to work with you to give our economy
an important jump-start by making tax relief retroactive.
Bush's tax-cut plan isn't fully implemented for five years. Thomas
knows that Bush wanted to implement the first year of marginal rate
reductions retroactively, so they'd have an impact now. By referring
back to Bush's original proposal, and targeting only the lowest
income bracket retroactively, Thomas intends to cut taxes by less
than one-tenth of one-percent of the Gross Domestic Product, which
will do nothing to spur short-term economic growth. This isn't
"the art of the possible." It isn't art at all.
Thomas also took the occasion of his appearance on Limbaugh's show
to disparage Reaganomics. Ronald Reagan, Thomas said, agreed to
$2 in tax cuts for $3 in new spending. Read David Stockman's book,
Thomas told Limbaugh. So, now the Republican chairman of the House
Ways and Means Committee parrots the most left-wing elements of
the Democrat Party.
Stockman, Reagan's first director of the Office of Management and
Budget, insisted that Reagan choose between cutting taxes and building
up the military. It was a false choice that Reagan refused to make.
Stockman eventually found work elsewhere. However, it's worth noting
that the current Republican plan, once fully implemented, returns
about $1 in tax cuts for $2.50 in new spending — that's $1.6
trillion in tax cuts from a projected surplus of $5.6 trillion,
without including 4% or more growth already built into the federal
budget.
Meanwhile, Republican Sen. Pete Domenici recently stated that Bush's
4% limit on federal spending increases next year is unrealistic.
This, of course, is precisely the kind of resistance to spending
limits that Reagan faced from Democrats and Republicans throughout
his presidency. During Reagan's eight years, congressional Democrats
and Republicans had every opportunity to cut spending. In fact,
Reagan asked repeatedly that they do so. But they wouldn't.
George Bush is a Reaganite who seeks to continue the Reagan Revolution.
It's time that Republican congressional leaders either get behind
their president or get out of the way.
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