- The Washington Times - Wednesday, December 5, 2001

Yesterday, the hopelessly stalled Senate finally began serious work on the economic stimulus package as a group of congressional negotiators sat down to try to work out a compromise between the House-passed plan and the Senate's sorry display of political gamesmanship.
Senate Majority Leader Tom Daschle deserves most of the blame for this unusual arrangement, since, under his post-September 11 leadership, the Senate has fiddled with agricultural spending and railroad pension plans even as the economy has burned and is now in a recession.
While do-nothing senators dithered, the House acted. More than a month ago, it passed a smart series of tax cuts, which repealed the corporate alternative-minimum tax (AMT), increased depreciation allowances for investments and accelerated the phase-in of income-tax rate reductions. Unlike the pork-heavy federal spending and tiny, temporary tax cuts heretofore under consideration in the Senate, the House measures are certain to stimulate investment and encourage innovation necessary prerequisites for economic growth.
One of the economists who assisted with the passage of those supply-side stimulus measures was House Majority Leader Dick Armey. During a breakfast meeting yesterday with editors and reporters at The Washington Times, Mr. Armey said that while "politics will never determine my economics," the political decisions that encourage private-sector investments will also encourage economic growth. To that end, Mr. Armey advocated a hard line on any conference compromise on the repeal of the AMT, which he characterized as a "kick-'em-while-they-are-down tax." He also called for House negotiators to insist on increased depreciation allowances, an idea that had wide bipartisan support before post-September 11 politics entered the picture. Both policies also received the support of another noted economist, Alan Greenspan, the chairman of the Federal Reserve board.
Moreover, taxpayer dollars are a precious resource, not to be squandered on silly spending measures that do nothing to alleviate the ongoing recession. Mr. Armey actually admitted that he thought House Republicans compromised too much with their Democratic counterparts on the bill, which passed along party lines.
And that is precisely the danger that, during negotiations with stubborn Senate Democrats, Republicans will compromise away stimulus measures and receive nothing in return. After all, bait-and-switch is an old Democratic tactic and the battle over the "Bush recession" has already begun.
Republicans need to remember that bipartisanship works both ways. While it is critical that President Bush have a stimulus package to sign before Congress goes on its holiday recess, House Republicans must make certain that the silk purse of supply-side tax cuts do not turn into the sow's ear of additional, non-stimulative federal spending.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide