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Saturday, August 25, 2001
While he was campaigning for the presidency, George W. Bush looked at the federal government's growing surpluses and insisted that much of that money must be returned to taxpayers in the form of a large tax cut that would primarily benefit the wealthy.
Eight months into his presidency, George W. Bush looks at a dwindling surplus and declares that his administration "took exactly the right action, at the right time, by pushing the largest tax cut in a generation."
Forget snake oil. For President Bush and most Republicans, it's a tax cut that's good for what ails you, no matter what that might be.
Despite the Democrats' attempt to blame the tax cuts for the current budget squeeze -- with a non-Social Security surplus that now stands at less than $1 billion -- it is the economic slowdown resulting in lower tax collections that is at fault.
To the extent that the tax cut has had an immediate impact, it comes in the form of this year's rebates, which the Democrats legitimately promoted as a response to that downturn.
The president's "right action at the right time," included almost no immediate relief.
But if you look down the road, when the real impact of the president's goody bags for the rich will be felt, then it becomes clear that the tax cut will choke off government spending, as it was intended to do. However, it will not just cut at the pork and inefficient programs that the Republicans love to decry, but will make it difficult, perhaps impossible, to create a real prescription drug program in Medicare or to bolster Social Security to deal with the baby boomers.
George W. Bush ran for the presidency claiming that he could do it all -- cut taxes, increase spending for education and the military and Medicare, pay down the debt and reform Social Security. It was always a hollow promise, but it vanished into thin air when the surplus that was supposed to make it possible started shrinking.
There will be much wailing and gnashing of teeth about the need in the current economic climate to use Social Security revenues to pay for day-to-day government operations. The Democrats are already accusing the president of "raiding" Social Security and the administration is going through extraordinary accounting contortions to avoid the appearance of such a raid.
The use of those funds will not directly threaten future Social Security payments and is more of a sideshow than anything else. The real issue is this: When President Bush, with the help of some Democratic congressmen, pushed through a tax cut that will put hundreds of billions of dollars into the hands of those who need it least, he made it much more difficult for the government to fund programs for those who need it most.
It's not too late to undo the damage, but it will require working around a president who, under the kindest interpretation, is in a deep state of denial -- and tax cuts just seem to make his condition worse.