The best news on the economic and budget front in December was the failure of Republicans to ram their big corporate tax-cut package through Congress in the name of "stimulus." The bad news was that nothing was done to boost the economy and help those most hurt by the recession.
What went wrong? Unfortunately, press reports have offered little help in sorting things out, since reporters apparently believe it is their professional duty to report both sides' assertions without qualifying them with factual information. So here's a chronology of what really happened.
The Bush administration has come up with still another outrageous
tax-giveaway scheme, this time not by legislation but by administrative fiat. In
mid-December, the administration announced that it would soon send out billions
of dollars in tax refunds to companies that have flouted the tax laws--and to the
major accounting firms that helped them do so.
As you've probably heard, government estimators now predict some $1.9 trillion in non-Social Security budget surpluses over the next decade if current tax and spending policies are maintained. That's more than a $1 trillion increase from what was predicted just last February. What's going on?
Today's lesson: Why paying down the debt is good for Social Security (and the rest of the government, too).
George W. Bush feels those projected federal budget surpluses burning a hole in his pocket. And he wants to do away with them as quickly as possible, with big tax cuts. Some of my liberal friends feel a similar sensation. They've charged Clinton and Gore with pursuing a Coolidge-like economic strategy that would prioritize paying down the debt over bold new spending. But there are good liberal reasons for making debt reduction our first priority, at least for now.
Special-interest zeal to use the national-security crisis as an excuse for huge new upper-income tax breaks continues unabated in Washington, D.C.
On a party-line vote, the House on October 24 approved a bloated "stimulus" tax-cut bill that makes a mockery of the previous bipartisan agreement between congressional leaders and the administration that additional stimulus measures should be temporary and limited to a total of $50 billion to $75 billion. Instead, House Republicans have adopted a laundry list of new tax breaks, some explicitly permanent, that are officially expected to cost a staggering $212 billion over the next three fiscal years--and heaven only knows how much thereafter.