- The Washington Times - Monday, November 6, 2000

In the midst of a bipartisan spending orgy on Capitol Hill and on the eve of the presidential and congressional elections, it is worth recalling the preferences that Federal Reserve Chairman Alan Greenspan expressed in July 1999 regarding the disposition of the then-burgeoning federal budget surplus. Mr. Greenspan's "first priority" was to "let the surpluses run" i.e., let the surpluses be used to reduce the $3.6 trillion federal debt held by the public.
Mr. Greenspan then mentioned a second priority one that could, under specific circumstances, supersede his first preference. "[M]y second priority," the Fed chairman elaborated, "is if you find that as a consequence of those surpluses they tend to be spent, then I would be more in the camp of cutting taxes."
The ongoing bipartisan spending extravaganza that Mr. Greenspan feared has in fact been taking place for the past several weeks as the budget endgame has unfolded in Washington. Perhaps no other issue makes a stronger case for the election of George W. Bush than the imperative to restrain the federal spending explosion and to return a significant portion of the projected non-Social Security budget surpluses to America's overtaxed households, where the surpluses originated. With plans to increase spending above and beyond current projections by more than $2 trillion over the next 10 years, a Gore presidency would surely confirm Mr. Greenspan's worst fears.
Even beyond the indisputable fact that excess revenues not returned to taxpayers will inevitably be spent by Washington's politicians, the case for broad-based tax relief is unassailable. Measured as a percentage of gross domestic product, today's federal tax burden has matched the record high achieved during World War II. The nonpartisan Tax Foundation estimates that the federal tax burden in 1998 claimed 25.9 percent of a median two-income family's total income ($68,605), representing more than an 80 percent increase relative to the 14.2 percent federal tax burden that prevailed 40 years earlier. When state and local taxes are included, the Tax Foundation reported, total taxes now claim a greater share of a median two-income family's income (39 percent) than food, housing, transportation and clothing combined.
Meanwhile, a nominally Republican-controlled Congress and a Democratic White House have demonstrated themselves to be utterly incapable of spending restraint. Since the 1997 balanced-budget agreement, which established spending caps for discretionary spending (the roughly one-third of federal outlays that is unrelated to entitlements and interest payments), Congress and President Clinton have conspired to shatter those spending targets each year. Indeed, discretionary spending for fiscal 2001 at last count will be about $640 billion, or $100 billion above the cap set for 2001 by the 1997 agreement.
Like Mr. Greenspan and unlike Mr. Gore, Mr. Bush prefers tax cuts over spending increases. Mr. Bush's broad-based tax cuts, which would account for less than 30 percent of the total budget surpluses CBO has projected through 2010, would reduce tax rates for all taxpayers; remove 6 million taxpayers from the federal income tax rolls; double the $500-per-child tax credit; eliminate the savings-depleting death tax; and significantly alleviate the marriage penalty, which compelled about 25 million couples to pay nearly $1,200 more in income taxes last year than they would have paid if they were merely living together.
For all Mr. Gore's class-warfare vitriol during the campaign, the fact remains that "the wealthy" will actually pay a higher portion of total federal income taxes after Mr. Bush's plan is fully implemented. Reflecting an increase in today's steeply progressive tax system (the demonized "top 1 percent" earned 17.4 percent of income in 1997 and paid 33.2 percent of the total federal individual income taxes that year), the federal income tax burden of families earning more than $200,000 would increase from 39 percent today to 41 percent under Mr. Bush's plan. Far more important, the spending binges that have characterized the recent budget years would be restrained under a Bush presidency, rather than irresponsibly accelerated under a Gore administration. The beneficiaries of Mr. Bush's policies would all be taxpayers. Under Mr. Gore, the vast majority of taxpayers would be the victim of his unrestrained spending and in adequate tax relief. The choice could not be more clear.

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