Under The Rug
By INVESTOR'S BUSINESS DAILY
Investor's Business Daily Editorials
Posted Friday, May 18, 2007 4:20 PM PT
Budget: Congress' massive $2.9 trillion spending plan makes it clear what Democrats stand for: higher taxes, bigger deficits and runaway Medicare, Medicaid and Social Security spending that will bankrupt America.
When President Reagan cut income tax rates in the 1980s, Democrats screamed that it was just a boon to the rich. But the economy expanded in historic terms, Reagan was re-elected in a 49-state landslide and now even Democrats concede the former movie star's greatness as a president.
George W. Bush's historic tax cuts were greeted with similar charges from Democrats. Yet since they became law, nearly 8 million jobs have been generated during five straight years of growth, unemployment is a mere 4.5% and government coffers — thanks to all the economic activity — have enjoyed record tax revenues.
Bush too was re-elected.
Have Democrats learned nothing? Senate Majority Leader Harry Reid of Nevada bragged that the Democrats' new budget "rejects the misplaced priorities of the Bush administration, which wants to hand out tax breaks worth $150,000 a year to those making more than a million dollars, while making deep cuts in education and Social Security benefits."
If and when Democrats occupy the White House at the same time they control Congress, you can be sure of "deep cuts" in the promised Social Security benefits for which all sides know the government cannot pay.
You can also be sure Democrats would pair those benefit cuts with tax hikes. Until then, their modus operandi is to sweep the impending Social Security crisis — along with the approaching Medicare and Medicaid fiscal disasters — under the rug.
Congress' nonbinding budget plan narrowly passed the House, with 13 Democrats voting against it. In the Senate, two wayward lawmakers represented the only Republican support. The measure increases deficits the next two years above Congressional Budget Office projections, with $23 billion more in nondefense spending than President Bush's $933 billion request. The White House has threatened to veto the actual spending bills later in the year.
The Democratic budget magically achieves a $41 billion surplus in 2012, even as Congress lets the Bush tax cuts expire in 2010. The private economy, presumably, will just ignore that immense automatic tax increase and keep chugging along.
Democrats have also been touting the plan's "allowance" for $180 billion in middle-class tax cuts — but that assumes both a waiving of the pay-go rules and the materialization of the promised budget surpluses. So don't hold your breath.
The budget did succeed in kicking the alternative minimum tax can down the road for another year. But the fact that "tax on the rich" has mutated into a huge middle-class burden should be a warning to those at every income level.
As always, the lesson remains clear: When liberal Democrats control the purse, keep an eye on your wallet.
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