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Fiscal Apple Pie in Congress

September 25, 2004

There are few things so beloved in Washington as election-eve tax cuts -- never mind that they will deepen annual deficits already in the hundreds of billions of dollars and add to the burden faced by future generations.

Thursday's vote on Capitol Hill was a clever ploy orchestrated by the White House -- an attempt to get Democrats to either rubber-stamp an extension of ostensibly temporary tax cuts or, better yet, to get them to oppose that fiscal equivalent of apple pie, middle-class tax cuts.

Rubber-stamp they did, in what may have amounted to the White House's second most desirable outcome. Only the occupants of the very safest Democratic congressional seats could afford to vote no on measures that would retain higher tax credits for each child, an expansion of the lowest tax bracket of 10%, relief from the so-called marriage penalty, suspension of the burdensome alternative minimum tax, and a few business tax breaks for good measure.

President Bush's promise for a second term -- to halve the federal deficit, running $422 billion for this year alone -- was built on the premise that his tax cuts over the last three years were "temporary" and that their "expiration" would relieve the burden on the Treasury.

It's a disingenuous premise, as evidenced by Thursday's votes in the House and Senate, expected to cost $146 billion over 10 years. But Bush still gets it both ways: He can promise to reduce the annual deficit while his chief GOP allies in Congress make sure the tax cuts are "temporarily extended." After the vote, Bush crowed that it "brings us one step closer to making the tax relief permanent."

Thursday's measures, in the absence of spending cuts, are as fiscally irresponsible as huge tax cuts for the rich. These middle-class tax cuts are merely an appetizer to extending other tax cuts after the November election. Even Democratic candidate John F. Kerry, who has made his own promises to the middle class, had little to say after the votes.

The government's tax revenues are insufficient to keep up with national needs, as even Republicans acknowledge with their failure to finance their tax cuts with offsetting cuts to spending.

At least in the old days, President Reagan was honest enough to seek spending cuts to help pay for his tax cuts, and then to dampen his tax-cutting zeal when lower rates failed to magically flood the Treasury with new revenue, as Arthur Laffer's notorious napkin graph had promised.

Voodoo economics, as George H.W. Bush called it, is still not working, and it's disappointing that so few in Washington have the courage to insist on long-term budgetary sanity.

In the Senate, only one retiring Democrat and two moderate Northeast Republicans -- Maine's Olympia J. Snowe and Rhode Island's Lincoln Chafee -- voted against the tax cut extensions.

As for John McCain, a supposed leader of the principled fiscal hawks, he caved in and voted yes, though he was quick to say, "We have got to start making some tough choices around here." We hope it'll soon be convenient for him to get started.

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