Mortgaging America's future
Other Editors Say
Record tax cuts are foolish without corresponding cuts in spending
The Washington Post
The Senate and House have now bowed to the president's wishes and passed tax cuts of a size and content that seemed unattainable just a few months ago. If the two chambers can work out their differences in Congress, and given the &
36;1.3 trillion tax cut of just two years ago, President Bush will have presided over some of the largest tax cuts in history ' and he's not done yet. Give this administration credit for audacity; after Ronald Reagan cut taxes in 1981, 16 years (and four major tax increases to help repair the deficits that followed) passed before taxes were cut again. But as The Washington Post's Dana Milbank and Dan Balz have reported, the Bush administration intends to make tax cuts an annual event, as reliable a feature of spring in Washington as the cherry blossoms. The flowers quickly disappear, but the effect of these tax cuts will be enduring ' and enormously damaging. Mr. Bush ' and his enablers in both parties in Congress ' are leading the country in a radical direction. They will widen the gap between poor and rich. They will unfairly burden the next generation of taxpayers. And they will threaten the country's long-term well-being by starving the government of revenue for essential services that neither Mr. Bush nor his congressional supporters have the courage to admit will become unaffordable.
As he flies across the country selling his tax plan, Mr. Bush often likens the government to a household that needs to carefully manage its budget. But no family would plan for its future the way Mr. Bush is running the federal government: recklessly spending money it doesn't have and piling up debt it can't afford even as it knows the really big bills are about to come due. The Congressional Budget Office forecasts a &
36;300 billion deficit this fiscal year ' an all-time record ' while the investment firm Goldman Sachs says a more realistic number is &
36;425 billion. That's edging close to a troublingly high percentage of the economy. But the real problem is not this year or next. Rather, it's the long-term cost, combined with the budgetary hit just around the corner, when the baby boomers start to retire and put new demands on Social Security and Medicare. The administration highlighted this problem in its own budget documents, describing the real fiscal danger as the &
36;18 trillion shortfall ' yes, trillion with a T ' projected in those two programs, an amount equivalent to nearly half the household wealth in the United States last year. Fixing either of these programs will be hugely painful, but the administration ' rather than trying to save money for this challenge ' is instead handing benefits overwhelmingly to the wealthiest Americans. And for what reason? Administration rhetoric notwithstanding, taxpayers are not stooped under historically high burdens; a new report by the Congressional Budget Office shows that, even before any new tax cuts, personal income taxes will be at their lowest as a percent of gross domestic product since 1943.
The administration and its supporters talk tough about cutting spending, but no one has identified cuts anywhere near the magnitude required to close these long-term gaps; indeed, the administration is proposing a costly new prescription drug plan for seniors. Whenever anyone puts serious proposals on the table ' as did House Budget Committee Chairman Jim Nussle, R-Iowa, when he called for &
36;470 billion in mandatory cuts ' Democrats and Republicans flee with admirably bipartisan synchronicity. If the administration intends to end up with a far smaller federal government that does far less ' the inevitable result of its policies ' it ought at least to come clean with the American people about what the tradeoffs will be.