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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (18831)	12/10/2007 7:38:39 PM
From: Ann Corrigan	Respond to of 224986

Tax Fix May Doom Spending Cuts and Democrats By Kevin Hassett, bloomberg.com, Dec 10 2007 Dec. 10 (Bloomberg) -- House Democrats find themselves at a dreaded fiscal-policy Rubicon, and they have their political allies in the U.S. Senate to thank for it. Wrapping up what has become easily the most disastrous legislative year for a majority power in memory, Speaker Nancy Pelosi will do her party significant electoral harm whether she crosses the river or not. Republicans are quietly celebrating and are increasingly optimistic about next year's elections. As the Democrats surged to victory in the 2006 election, fiscal discipline was the centerpiece of their economic platform. In a widely distributed document, ``A New Direction for America,'' Democrats promised that ``instead of piling trillions of dollars of debt onto our children and grandchildren, we will restore `Pay-As-You-Go' budget discipline.'' Last week, we learned that this was all for show. Senate Democrats shot the Paygo rules in the head, placed them in a casket, and buried them six feet under in an unmarked grave. They did this when the Senate voted 88-5 to pass a $50 billion one-year ``patch,'' or temporary fix, of the alternative minimum tax. No Picnic Absent such a patch, an estimated 23 million households would find themselves ensnared by the tax when returns are due on April 15. And make no mistake, the AMT -- which was originally intended to make sure wealthy folks paid their share of taxes, but was never indexed for inflation -- is no picnic. A family of four with an income of $75,000 would find itself owing an extra $2,000 or so in April if the law isn't changed. But a fix has been politically difficult. Republicans have wanted to repair the AMT, yet they haven't been willing to increase other taxes (such as those on hedge-fund managers) to recoup the lost revenue. Democrats have wanted to adhere to their Paygo rules, though have been unable to gather enough votes to do so and haven't had the political will to work out a long-term fix with their Republican colleagues. In the House, such disagreement is inconsequential. A simple majority can pass any bill, and Democrats have patched the AMT and paid for it. But in the Senate, it is much easier for the minority to obstruct the majority. The result is that Senate Democrats have given up trying to raise revenue to pay for the patch. `Historic Mistake'? The cave on fiscal discipline has House Democrats livid. Representative Rahm Emanuel of Illinois captured the mood well, when he told the New York Times, ``As an amateur student of constitutional history and as a member of Congress, I have come to the conclusion that the Senate was a historic mistake.'' Generally speaking, if your team is criticizing the Founding Fathers, then you are losing. Tempers are flaring because Democrats are now in a can't-win situation: If they patch the AMT and don't pay for it, then they have broken their word on one of their central issues. If they don't go for the patch, then 23 million angry households will be stuck with a tax increase next year. The smart money in Washington is betting that House Democrats will give in and agree to the patch without paying for it. That would be a ringing defeat for the Democrats, who are beginning to look like the Miami Dolphins. Wrong on Iraq Look at some other key parts of their 2006 election platform. Not only have Democrats failed to get President George W. Bush to withdraw American troops from Iraq, but the ``surge'' that they opposed so vehemently is proving effective. They promised to end pork-barrel spending, but have been as addicted to pet projects as their predecessors. Now, they are breaking their own Paygo rules. The really bad news for Democrats is that voters have noticed. As we learned when President George H.W. Bush was voted out of office for violating his pledge not to raise taxes, voters expect their leaders to do what they say they will do. Only about 20 percent of those surveyed last month by the Gallup Organization approved of the way Congress is handling its job. In an NBC News/Wall Street Journal poll, just 39 percent said their own representative in Congress deserved to be re- elected. When Democrats took control of Congress, they could have chosen to work with the president and seek bipartisan solutions to problems. Bush invited such an approach with his appointment of the immensely popular Hank Paulson as Treasury secretary. Paulson spent an enormous amount of time pushing the overhaul of Social Security and other entitlement programs, to no avail. Americans clearly yearn for an end to divisive politics. Incumbents in the House and Senate may soon wish they had responded to voters' desires a little sooner. (Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. Last Updated: December 10, 2007