Making the Jobless Pay
May 13, 2003
latimes.com
Here's a snapshot of what's driving the tax cut bills
now in Congress: In order to give President Bush more
benefits primarily for the wealthy, the Senate Finance
Committee rejected extending the Temporary
Emergency Unemployment Compensation program,
which provides additional weeks of unemployment
insurance benefits to people unable to find a job. On
top of that, the tax cuts being contemplated have very
little chance of generating the promised jobs, given that
despite $1.3 trillion in cuts approved in 2001, the
United States has lost 2 million jobs since Bush
became president.
In the last three months, more than half a million jobs
have been lost. On this issue, the gap between theory
and reality, between claim and outcome, is too big to
paper over.
Treasury Secretary John W. Snow has claimed that the
cuts would revive what he called a "soggy" economy. But what if they simply
drown the economy in an ocean of debt? The deficit is already soaring as a result
of the first tax cut.
The Congressional Budget Office has just raised its estimate of the deficit this
year to more than $300 billion from the $246 billion it predicted in March.
Tax revenues are $62 billion lower than they were last year at the same time,
while spending is $76 billion higher. Congress will probably have to respond
soon to the administration's request to raise the debt ceiling from its limit of $6.4
trillion.
Faced with a 6% unemployment rate, Bush is pressuring the Senate to pass
something similar to the deceptive $550-billion tax cut package approved by the
House on Friday. That package includes much of Bush's original $726-billion
proposal and would not entirely eliminate the individual income tax on corporate
dividends.
It also assumes that the cuts will not be made permanent and will even be
canceled at the end of 2005, an unlikely scenario at best. The Senate passed a
proposal for more than $400 billion in cuts meant to be offset by other rate hikes
- another unlikely occurrence - to technically bring the total cut down to $350
billion.
Some of the lesser measures in the Senate plan might actually help stimulate the
economy. For instance, $20 billion in direct aid to the states over two years. But
overall, the cuts are targeted at upper-income taxpayers, not the middle class,
the poor and the unemployed - the people who would funnel the money back
into the economy quickly.
With two Republican senators, George Voinovich of Ohio and Olympia J.
Snowe of Maine, holding their ground at $350 billion in new tax cuts, which is
already too much, Bush is turning across the aisle. He is visiting the states of
centrist Sens. Jeff Bingaman (D-N.M.), Ben Nelson (D-Neb.) and Evan Bayh
(D-Ind.) to pressure them. They should have at least the backbone of Voinovich
and Snowe. |
