- The Washington Times - Friday, August 24, 2001

As expected, the White House's mid-session budget review has elicited cries of anguish from Democrats, who have been yammering about budget policy ever since President Bush fulfilled his campaign promise to provide substantive tax relief to Americans. Senate Budget Committee Chairman Kent Conrad, Democrat from North Dakota, said that the decline in expected surpluses for the current fiscal year 2001 represented "fiscal mismanagement big time." Senate Majority Leader Tom Daschle of South Dakota and House Minority Leader Dick Gephardt of Missouri have been squealing for days.
These are the facts, according to the Office of Management and Budget: The $281 billion surplus projected in April for fiscal 2001 has declined to $158 billion, of which $157 billion represents the surplus in Social Security. The two largest components of this $123 billion revision relate to an estimated $40 billion in well-timed income-tax relief that was made retroactive to Jan. 1 and nearly $50 billion in foregone tax revenue attributed to the economic slowdown.
Regarding tax relief, the howls from Mr. Daschle are especially disingenuous. In March, he co-sponsored a bill (Senate 628) that would have provided at least $60 billion in tax relief in 2001. In addition to cutting the lowest income tax rate from 15 percent to 10 percent, which is what Mr. Bush signed into law in June, Mr. Daschle's proposal would have sent a $300 check to every taxpayer, including the roughly 34 million workers, according to the Tax Foundation, who pay payroll taxes but no income taxes. Despite all of his whining about the Social Security Trust Fund, Mr. Daschle's gambit would have used general revenues to reduce Social Security taxes. And it would have forced the government to raid Social Security's so-called "lock box" in 2001, something Mr. Bush's revised budget does not do. Moreover, even though it would have been done indirectly, the back door reduction in payroll taxes would have the indisputable effect of further jeopardizing the nation's ability to address Social Security's long-term problems.
Regarding the nearly $50 billion in revenue that will not be collected in 2001 because of the economy, Messrs. Conrad, Daschle and Gephardt surely know that this is the direct result of the drastic slowdown that began during President Clinton's final year. Indeed, over the past four quarters, the economy has grown a measly 1.3 percent, including a pathetic 0.7 annual growth rate for the second quarter. By contrast remember the lies told by the Clinton-Gore administration about inheriting the "worst economy in 50 years" the economy grew by more than 4 percent in 1992.
As Mr. Bush and his economic advisers have repeatedly argued, economic growth, encouraged in large part by tax reductions, will facilitate solutions to the long-term problems projected for Social Security and Medicare. It is just a shame that the economy bequeathed to Mr. Bush was vastly weaker than the economy Mr. Clinton inherited from the president's father. And no amount of whining from Messrs. Conrad, Daschle and Gephardt can change that fact.


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