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Congress' Fiscal Wreck

October 18, 2002

The economy still sputters. Unemployment and the poverty rate are up, while job creation and consumer confidence are down. But faced with a budget crisis and a midterm election, lawmakers chose politics Wednesday, shoving off their legislative agenda to a possible lame-duck session next month. Congress' fiscal house isn't a mess; it's a wreck.

Congress has approved only two of 13 required spending bills to fund government in 2003, though the new fiscal year started weeks ago. To avoid a government shutdown, Congress has passed resolutions that allow stop-gap funding at current levels but dodge tough debates about a real budget. Congress alone cannot cure a slump, but consumer confidence and economic stimulation are affected by its spending decisions.

Workers already hit by the downturn may soon feel its effects more deeply. Unless Congress extends emergency unemployment aid, which is scheduled to expire at the end of December, up to 3 million of the out-of-work will be affected. Senate Majority Leader Tom Daschle (D-S.D.) has backed modestly increasing the federal minimum wage to $6.15 from $5.15 and extending unemployment benefits for 13 weeks, with an additional seven weeks in high-unemployment states such as California and Texas.

Democrats might wish that such fragmented measures amounted to a coherent alternative to the White House's chief economic aim of making its 10-year, $1.35-trillion tax cut permanent and fully abolishing the estate tax. But they are not enough.

Enter House Minority Leader Richard A. Gephardt (D-Mo.), who Tuesday proposed his own $200-billion stimulus plan of business investment -- and even more tax cuts. He criticized the 10-year tax cut that Congress approved last year but was silent about whether it should be repealed.

Instead, Gephardt called for giving $75 billion in cuts and rebates to working-class families and small businesses and spending more on school construction, health care and the like. Gephardt opened the door to a possible flood of new tax reductions that appeal to the different constituencies of Republicans and Democrats.

As Nov. 5 approaches, lawmakers won't touch the issue of rolling back tax cuts. However, until Congress revisits the trillion-dollar issue, it can rearrange the furniture all it wants but a real housecleaning will never take place.

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