By JIM MITCHELL / The Dallas Morning News
Boy, the gloves are off now! And the fighting words are "recession," "deficit," and "taxes."
Repeal or delay the tax cuts? "Over my dead body," says President Bush, in a graphic denouncement that recalls his father's "Read my lips, no new taxes" retort.
But how, says Senate Majority Leader Tom Daschle, do you plan to pay for the war on terrorism and whatever else? And while you are at it, explain why federal deficits have become OK.
It has been a while since we have seen deficits wielded like swords. But Mr. Daschle, who recently hailed the president for how he has waged the war on terrorism, now has accused him of mismanaging the economy, a not-so-veiled criticism that may have doomed any hope of a bipartisan economic stimulus package.
The ensuing sound-bite exchanges between the Senate Democratic leader and the president signal a full-scale tax and budget battle in an election year.
So what does this impasse say? Has the economy gotten so strong that Congress needs to do nothing? Ask the Congressional Budget Office, the Federal Reserve, any laid-off worker, or a business executive trying to figure out capital investment requirements. They are as uncertain as the rest of us. There are recovery signs but just as many indications that the recession hasn't abated.
Blame the renewed political hostilities and the impasse on a rapidly approaching congressional election. In the absence of another terrorist attack, Democrats in particular have deemed it politically safe to return to the partisan tax and budget debates that predated Sept. 11. For congressional Democrats, that means refighting last year's lost tax cut battle.
Listen closely to Mr. Daschle. He blames the recession and anticipated budget deficits on the Bush tax cuts, which Mr. Daschle continues to maintain are too large and too heavily weighted toward the nation's richest Americans. But for all the criticism, he has stopped short of calling for a repeal of some of last year's tax cuts.
The reason? Criticizing the tax cuts is a good election-year ploy. But actually delaying them, which in political terms would amount to advocating a tax hike, simply won't fly at the ballot box, particularly during a recession.
So the nation gets talk about recession and potentially costly inaction. The stock market had factored in the probability of a stimulus package. So had businesses and workers. Moreover, the impasse continues to press the Federal Reserve, which has to be wondering how much lower it should push interest rates.
Look for more ugliness later this month when Congress returns to work and the president delivers his State of the Union address. Democrats are lying in ambush for the president's budget, which is certain to dip across the imaginary line that partitions Social Security receipts from other revenue. That is likely to retrigger last year's partisan debates over the vanishing surplus and Social Security.
Meanwhile, help for laid-off workers, a temporary reduction in payroll taxes, and other stimuli will remain on hold. And if by chance economic help does arrive, it will be too late for Americans who already are badly bruised and battered.
A just-released study by the Milken Institute, a California-based think tank, predicts that the Sept. 11 terrorist attacks will cost the economy 1.6 million jobs this year and will continue to hurt economic activity into 2004. Congress' approach is like dialing 911 and being told that the ambulance will be on the way just as soon as the mechanics decide which brand of motor oil to use in the engine.
It just doesn't make sense. And it is bad faith. |
