America's tax code needs a serious overhaul. The last clean-up was in 1986, when Ronald Reagan turned away from his tax-slashing past to partner with a Democratic Congress and close loopholes, change rates, and broaden the tax base. Over the intervening decades, lobbyists have left their Gucci footprints all over the code, and our system is a bigger mess than ever -- one that should give both Democrats and Republicans pause.
The idea started on the outer precincts of the right. Thomas DiLorenzo, an economist who calls Ron Paul "the Jefferson of our time," wrote in September that the housing crisis is "the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers." The policy DiLorenzo decries is the 1977 Community Reinvestment Act, which requires banks to lend throughout the communities they serve.
Progressive critics of the budget reconciliation bills now being melded together by a joint House-Senate conference committee usually attack the measures as tax breaks for the wealthy, paid for with budget cuts for the poor. That's true, as far as it goes. Many of the cuts now being considered -- reductions in Medicaid, Food Stamps, and child support enforcement, together with increases in interest rates on student loans -- wouldn't even finance one-seventh of the recent tax breaks for Americans making over $380,000.
During the second presidential debate last year, George W. Bush ventured that “the No Child Left Behind Act is really a jobs act when you think about it.” Democrats mocked President Bush, but education has always been critical for a president who asks voters to “sense my heart.” It is the only major issue on which he reached across the political aisle -- all the way to Senator Ted Kennedy -- to forge a broad consensus for reform. That's why it's sad now to see Bush eviscerating that consensus and empowering reform's critics. Monday's budget is the latest bad sign.