A Sashay to the Right, Some Smiles From the Left
"Every day that people read about a bill that would grant I.B.M. a $1.4 billion tax rebate
while turning aside Democratic calls for more assistance to laid-off workers is another
chance to convince voters that Republicans in general and Mr. Bush in particular are
no friends of the little guy.
Moreover, the stimulus bill fits a broader pattern of economic policy decisions in which the
administration has been criticized for rushing to deal with distressed industries — first airlines and
now insurers — while dawdling over help for individuals."
The New York Times
December 2, 2001
ECONOMIC VIEW
By RICHARD W. STEVENSON
WASHINGTON -- It was a wish list for
corporate lobbyists and conservative
ideologues alike. As such, the tax bill pushed
through the House this fall by Representative Bill
Thomas of California, the Republican chairman of
the Ways and Means Committee, was clearly an
opening gambit in what was sure to be an intense
partisan battle over how to revive the economy.
Treasury Secretary Paul H. O'Neill even dismissed
it as "show business."
It went well beyond what President Bush had been
seeking, particularly in granting some of the nation's
biggest companies the right to claim, immediately,
billions of dollars in tax credits built up over 15
years under the corporate alternative minimum tax.
But the administration, Mr. O'Neill's comments
notwithstanding, did little to distance itself from the
Thomas bill, which has come to embody the
Republican position on economic stimulus.
In one sense, the bill has had its intended effect. It ensured that bipartisan
negotiations over a stimulus package would start so far to the right that Democrats
could hope for little more than to drag them back to the center. For that, Mr. Bush
is no doubt grateful.
But in another way, Mr. Thomas's strategy has backfired. His bill's focus on
business tax cuts — 70 percent of its benefits in the first year would go to
companies — has proved a political windfall for Democrats. The legislation casts
Republicans as champions of corporate interests and the rich at a time when the
country is arguably looking for selflessness.
For that reason alone, some Democrats have not been unhappy that negotiations on
the stimulus package have bogged down. Every day that people read about a bill
that would grant I.B.M. (news/quote) a $1.4 billion tax rebate while turning aside
Democratic calls for more assistance to laid-off workers is another chance to
convince voters that Republicans in general and Mr. Bush in particular are no friends
of the little guy.
Moreover, the stimulus bill fits a broader pattern of economic policy decisions in
which the administration has been criticized for rushing to deal with distressed
industries — first airlines and now insurers — while dawdling over help for
individuals.
Democracy Corps, a liberal advocacy group headed by James Carville, Stanley B.
Greenberg and Robert M. Shrum, three of the most experienced Democratic
strategists, surveyed voters recently about post- Sept. 11 economic policy. In focus
groups, they reported, people could almost not believe that some of the Republican
proposals were for real, especially the repeal of the corporate alternative minimum
tax and the provision allowing immediate refunds to big companies.
"After they accepted the proposition that this was actually happening, they were
furious," said Jim Gerstein, the executive director of Democracy Corps. "Items in the
package like the A.M.T. repeal are completely at odds with the mood of the
country following the attacks. If this is the defining element of the stimulus debate
and the overall economic debate, it is very advantageous for Democrats."
It is not that the public is against tax cuts. A recent NBC News/Wall Street Journal
poll found 50 percent support for the basic Republican approach to reviving the
economy — tax cuts, with a special emphasis on tax breaks that encourage
businesses to invest and create jobs.
Even the Democracy Corps poll found very high levels of support for many
Republican ideas, including accelerating the planned reduction in income tax rates
for middle- and upper-income people.
The notion that Republicans want to cut business taxes because they are beholden
to corporate lobbyists and campaign contributors may have some truth to it, but it
obscures a more important point: Republicans don't cut taxes because they are told
to. They cut taxes because it is in their political DNA to do so. Cutting taxes, more
than any other issue, is what defines the party.
It helps that there are also legitimate economic arguments in favor of the Republican
approach, which is based on the reasonable notion that helping companies — or
employers, as Republicans are now careful to call them — will create jobs by
supporting renewed investment in plant and equipment.
Moreover, with his job-approval ratings at record levels and the nation much more
consumed for now with the war against terrorism than with the lurching of the
economy, Mr. Bush has not yet felt much of the political pressure to back away
from the Republican orthodoxy. Besides, he managed to push the biggest tax cut in
20 years through Congress this year even though public opinion was lukewarm at
best.
In the end, Mr. Thomas's bill may help Mr. Bush get much of what he wants in the
stimulus plan. Whether that proves to be a political victory will have to wait on
whether the economy bounces back quickly and strongly.
Because once the shooting war in Afghanistan starts winding down, public attention
will shift to the recession and what the president is doing to help. And as the current
president's father learned a decade ago, the political glow from a well-prosecuted
war fades faster than you can say "rising unemployment."
nytimes.com |
