- The Washington Times - Friday, January 26, 2001

President Bush began taking the reins of government this week, preparing to offer a broad range of legislative steps to reform problems that Bill Clinton and Al Gore refused to tackle.
Clinton and Gore talked a lot about the massive tax burden taxpayers will begin facing when the baby-boom generation becomes eligible to receive Social Security retirement benefits in 15 years, but they did nothing about it.
They talked for eight years about Medicare's coming insolvency, but they did nothing to fix its long-term problems. Ditto for education reform, tax reform and dozens of other areas.
Clinton talked endlessly about building "a bridge to the next century" by dealing with problems like Social Security, Medicare, health insurance and other social ills that still confront this nation. "But the past eight years have been characterized instead by a lack of resolve in dealing with these challenges," the Heritage Foundation concluded this week in a report filled with policy-making advice for the new president.
In sharp contrast to the minimalist, skimpy, riskless ideas Bill Clinton favored, Bush is aggressively carving out a bold, activist agenda to deal with the big problems his predecessor pointedly avoided.
The news media here is still in a state of disbelief that Bush is going ahead with the ideas that he proposed in the campaign, among them big tax cuts and the reform of Social Security and Medicare. They expected or hoped that he would abandon or at least substantially water down his proposals because of the closeness of the election. But he is moving full steam ahead with the agenda he ran on in the election which, after all, he won. Among the biggest things on his plate:
Building a better retirement system by reforming Social Security, which faces a crushing shortfall in the not-too-distant future. Bush wants to give workers more power over their money, letting them invest 1 or 2 percent of their payroll taxes in their own stock or bond funds. This would, over time, take a lot of financial pressure off the system. Equally important, it would yield a much higher rate of return on each worker's hard-earned tax payments.
Political opponents of this proposal (most of whom are heavily invested in stocks and bonds) have played the fear card, saying that stocks are too risky. But the plan is voluntary. A safety net would protect everyone from getting any less in benefits than they would get under the present system, and workers could, if they wished, put all of their contributions into safe U.S. Treasury bonds and still come out way ahead, or have a balanced fund of blue-chip, corporate stocks and bonds and do even better over their working lives.
Medicare faces a similarly large shortfall unless it is reformed. A government commission chaired by Sen. John Breaux of Louisiana, a Democrat, and Rep. William Thomas of California, a Republican who is now the Ways and Means chairman, came up with a widely praised market solution, but Clinton and Gore killed it.
The blue ribbon commission's plan would let beneficiaries use Medicare funds to buy private health-care plans of their choice, not unlike the popular federal health insurance system that government workers and members of Congress have now.
The Breaux-Thomas plan offers the benefits of choice and competition to keep health-care costs low, and it would also allow beneficiaries the opportunity to purchase prescription-drug benefit plans if they choose to.
Their plan has bipartisanship written all over it. And not only did Bush embrace it, so did conservative groups such as the Heritage Foundation, the National Center for Policy Analysis, and many others. Notably, there is also significant Democratic support for this concept, which is why we are going to get Medicare reform passed this year.
Tax reform: Over the next 10 years, the federal government will get $6 trillion more than it needs in surplus tax revenues. It will spend more than $20 trillion over this period. With tax burdens at their highest level since World War II (more than 20 percent of GDP), Bush thinks this is a good time to give about $1.3 trillion of this surplus back to the workers, leaving the rest to pay down the debt and other spending priorities.
The conventional wisdom has been that Bush won't get much of his tax cut plan because of the split in Congress. But Democratic Sen. Zell Miller of Georgia changed all that this week when he joined GOP Sen. Phil Gramm of Texas to introduce Bush's tax cut plan.
In the House, where Republicans have a narrow majority, and where tax bills must originate, the conservative Blue Dog Democrats sent a memo to their colleagues last week saying that "Using a portion of the projected surplus for tax relief is sound policy that many on both sides of the aisle embrace."
If that doesn't sound like the makings of a bipartisan approach to tax cuts this year, I don't know what does.


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