Henry,
<< I am part of that apparently small group that opposes tax cuts and new spending increases.>>
I'm with you, as are Bob Herbert and Thomas Friedman of the NYT. Here is Herbert's column of a couple of days ago. Friedman's "The Dumb Old Party" column was also a good one.
IN AMERICA / By BOB HERBERT
Reagan Redux
Here we go again.
Back in 1980 Ronald Reagan assured one and all that he could cut taxes sharply,
increase defense spending substantially and balance the Federal budget.
If it had been a television commercial instead of real life we would have seen a close-up of
Mr. Reagan happily saying, "I can do that," followed by a shot of him, perplexed, asking,
"How am I gonna do that?"
George Herbert Walker Bush famously derided Mr. Reagan's supply-side fantasies as
"voodoo economics." And the veteran Washington Post reporter Lou Cannon, in his book
"President Reagan: The Role of a Lifetime," described the reaction of James Baker, Mr.
Reagan's own chief of staff, to the transformation of economic fantasy into national policy.
He wrote:
"Though not particularly well-versed in economics, Baker suspected that there was
something screwy about the idea that massive tax cuts would increase government revenues.
Later, he would privately express regrets that the deficits had 'gotten away' from the
administration and wished he had paid more attention to the consequences of the tax cuts."
It has taken many painful years to overcome the worst of those consequences, with the bulk
of the burden being borne as usual by ordinary working Americans. But for the Republicans
in Congress it's as if those painful years never happened. Now, with the budget finally
balanced and the first sightings of an emerging surplus, they think it's once again party time.
And so the Republicans in both the House and the Senate celebrated by passing tax cuts
totaling nearly $800 billion over 10 years -- tax cuts that overwhelmingly favor the very
wealthy.
This is economic lunacy. If you put aside the Social Security surplus, which is already
spoken for, the available budget surplus over the next 10 years is estimated by the
Congressional Budget Office to be just shy of $1 trillion. But that estimate is based on the
assumption that appropriations for such "discretionary" items as the national defense,
education, housing, air traffic control, etc., will remain within the utterly unrealistic budget
caps passed by Congress in 1997. That will not happen. We can be absolutely sure of this
because the caps have already been blown.
Congress has been resorting to clownish gimmickry, like calling the census an emergency,
in order to evade the spending limits imposed by the caps. And even as some routine items
are being called emergencies for budget purposes, the budget office's 10-year forecast (on
which the estimate of the trillion-dollar surplus is based) does not take into account spending
for real emergencies.
As the Center on Budget and Policy Priorities has pointed out, "Hurricanes, tornados, floods
and international emergencies will not magically disappear" over the next decade.
What really takes the proposed tax cuts into the zone of total lunacy is that both Congress
and the Clinton Administration are planning for more -- not less -- in the way of
discretionary spending, including substantially increased expenditures for defense.
There is no trillion-dollar surplus.
The executive director of the Center on Budget and Policy Priorities, Robert Greenstein, said
two very conservative assumptions should be made when considering the tax cut -- that
overall nonemergency spending will at the very least remain at current levels, adjusted for
inflation, and that emergency spending will continue at the average rate of the past several
years, which is about $8 billion a year.
If you make those assumptions, he said, the estimated surplus over the next 10 years shrinks
from about $1 trillion to a little over $100 billion.
Said Mr. Greenstein: "How can you fit a $792 billion tax cut into a surplus that's only in the
$100 billion to $200 billion range? The answer is, you can't."
President Clinton says he will veto the tax cuts, which is a good thing for working people,
whether they are Democrats or Republicans. If the Republicans in Congress were to get their
way the entire non-Social Security surplus would vanish and the United States would be
back on the insidious slide toward Reagan-style budget deficits. |
