No Tax Cut. Period.

Democrats should draw a bright line: No tax cut. Period. The surplus should be used instead for the three things regular working families need most: affordable health care (including prescription drugs), child care, and better schools.


Instead Democrats are putting all their energies behind keeping Bush's tax cut closer to the $1.2 trillion they squeezed it down to in the Senate several weeks ago rather than the $1.6 trillion passed by the House. The $1.2 trillion "was a great victory for us," one prominent Democratic senator assured me recently. "In the end, if we can just keep 51 votes together, we'll triumph."


Triumph? How can a tax cut anywhere near $1.2 trillion be considered a Democratic triumph? The public won't see any significant difference between it and Bush's $1.6 trillion proposal. Besides, either way, Republicans (who, let us remind ourselves, have the majority in both houses of Congress, plus the presidency) will make sure that most of its beneficiaries are people in the top 5 percent of income earners. Most important, even at $1.2 trillion George W. surely will claim--and receive--full credit for convincing Congress to go along with a cut of this magnitude.


Democrats are playing a losing hand. Maybe it's because they're so used to being in power that they can't let go. They feel as if they just have to be part of the legislative process--even if their efforts do nothing more than transform a reprehensible tax bill into a merely outrageous one.


Yoo-hoo! Democrats? Anybody home? This is your wake-up call.


You don't want your fingerprints on this tax bill. Instead, you need a clear and consistent message for your campaign to take back Congress-- a campaign that begins less than a year from now. And you want an equally unambiguous message for the presidential contest that starts soon after. You have to offer a sharply different vision of America--a narrative about where the nation has been, where the Republicans want to take it, and where it should be heading.


Here's where it's been. Working families didn't get much out of the last decade of rapid economic growth. Median wages notched upward about 2 percent. In reality, most of the boom went to people at the top. From 1992 to 1998 (the most recent year for which IRS data are available), the average income of the richest 1 percent of Americans rose from about $400,000 to just under $600,000, and from 12.2 percent of the national net income to 15.7 percent. Together, by the end of the twentieth century, the richest 1 percent of American families, comprising 2.7 million people, had as many dollars to spend after they had paid all taxes as the bottom 100 million combined. Family incomes are diverging more widely than they have at any time since the 1920s, before the upheavals of the Depression, the New Deal, and World War II.


Here's where Bush and his fellow Republicans are taking the country. The Bush tax bill--even at $1.2 trillion--awards 40 percent of its benefits to the richest 1 percent of taxpayers. The bottom 80 percent will get less than a third of the benefits; the bottom 20 percent less than 1 percent. Bush says the "typical" family will get a $1,600 cut. But by the administration's own figures, families with incomes of less than $30,000 will receive an average cut of $264 a year; families with incomes of $30,000 to $40,000 will get $616.


And here's where Democrats should want to take the nation. Use the surplus to give working families affordable health care, child care, and better schools. Health insurance costs--in the form of co-payments, deductibles, and premiums--have been soaring. Meanwhile, the average working couple with kids is putting in seven weeks more time at work than they did a decade ago, making safe and affordable child care more urgent than ever. And to a greater extent than ever, good schools are the meal tickets for their children into good jobs in the emerging economy. Yet the Bush tax cut--even as trimmed by the Senate--will use up just about all the budget surplus, making it impossible to address these needs.


A working-family agenda is not just good policy. It's also smart politics. It offers the potential for uniting America's poor, lower-middle, and middle classes, and may even appeal to a good portion of the upper-middle. It will also tap into the giant party of nonvoters--disaffected, mostly young, and mostly modest-income--who now see nothing in politics that would directly improve their lives.


In 1993 the Republicans controlled neither the House nor the Senate, and Bill Clinton was president. But Republicans stuck together and crafted a clear message that swept them into power--taking over Congress in 1994 and, by a whisker and a fluke, the presidency in 2000. Their message celebrated individual initiative and demonized government.


Democrats now have an opportunity to turn the tables. Even if they lose the fight to beat back a tax cut--which seems most likely, given Republican majorities plus Republican-lite Dems--a principled defeat on this retrograde scheme is far better than a compromised "victory" on one almost as bad.


The Bush tax plan vividly reveals, as nothing before, that Republicans are the party of the rich, by the rich, and for the rich. If Democrats stick together and reject this tax plan outright--in favor of a bold package of supports for hardworking families--they can show why they deserve to be back in charge. If they pass up this opportunity, they don't deserve to be in charge.

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