- The Washington Times - Wednesday, March 28, 2001

When the growth rate of the economy began slowing in 1999, the Republican-controlled Congress repeatedly sent the Clinton White House tax-reduction bills. In September 1999, Bill Clinton vetoed a 10-year, $792 tax-reduction plan. Last year he vetoed two other tax bills the elimination of the marriage penalty and the termination of the death tax, both of which enjoyed bipartisan congressional support among the rank-and-file, if not the Democratic leadership. Moreover, on Dec. 1, 1999, when he unveiled his own tax-cut proposal, candidate George W. Bush observed, "If delayed until a downturn begins, tax cuts would come too late to prevent a recession." Note well: Mr. Bush issued this commonsense warning more than a year before Democrats en masse began accusing him of "talking down the economy."
Suddenly, with the economys manufacturing sector clearly in recession, retail sales in retreat and the stock market in the tank, bipartisan support, this time including the Democratic leadership, has emerged for immediate tax relief. Better late than never. Both parties appear to have agreed that a tax-cut stimulus package of at least $60 billion should be enacted during the current fiscal year, which ends Sept. 30.
Providing the wrong kind of tax relief, however, would be comparable to a doctors prescribing the wrong medicine to a sick patient. Therefore, its necessary to understand that all tax cuts are not equal. Predictably, Democrats are pushing variations of a redistributionist scheme that would have little long-term effect on incentives to work, save and invest. For example, Democratic Sen. Joe Lieberman has offered a one-time rebate plan that would dispense checks to all workers, including the millions who pay no income taxes. Sen. Max Baucus, the ranking member on the Senate Finance Committee, has a three-year plan averaging about $70 billion per year. The emerging twofold Democratic strategy is clear: On the one hand, they want to pass short-term tax relief, which will not endanger the long-term tax windfalls they fully expect to spend at a later date; on the other hand, they seek to bury President Bushs long-term, growth-oriented plan.
Just as he presciently warned in December 1999, fully 16 months ago, of the negative consequences of failing to cut taxes promptly, Mr. Bush issued another insightful prediction in his Saturday radio address: "hen money is left in Washington, there is a tremendous temptation for the government to use it. If you send it, they will spend it." The solution is simple: Congress should significantly accelerate Mr. Bushs 10-year, $1.6 trillion tax-cut plan, which, frankly, takes much too long to implement the proposals primary component of across-the-board tax-rate reductions. Providing short-term fiscal stimulus and ensuring long-term, growth-enhancing tax relief are not mutually exclusive. Both can be accomplished simultaneously. And should be.


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