- The Washington Times - Friday, November 16, 2001

During the two months since September 11, congressional Democrats have been determined to use that day's horrific events to camouflage their ongoing attempts to raid the public treasury. Indeed, their recent actions confirm that they have no intention of abiding by the post-September 11 agreement with the White House to raise the 2001 domestic discretionary spending limit from $661 billion to $686 billion. Their various spending initiatives are now approaching $725 billion, and there appears to be no end in sight.

While the examples of pork are too numerous to mention, exhibit A for this spending frenzy is the handiwork of North Dakota Sen. Kent Conrad. Before September 11, Mr. Conrad played the role of the self-appointed cop guarding the Social Security "lockbox." But once it appeared that the spending floodgates were about to open, Mr. Conrad plunged in. Ostensibly to enhance "homeland security," Mr. Conrad sought to add millions of dollars in subsidies for bison ranchers, including billionaire Ted Turner. At the same time, Sen. Robert Byrd, the Democratic chairman of the Appropriations Committee, crafted a $20 billion "homeland security" bill that included funds for school construction and highways.

Fortunately, the Democratic spending bandwagon met some stiff resistance. On Wednesday, Senate Republicans blocked a $73-billion Democratic-crafted "stimulus" bill. It was overloaded with spending initiatives that had little to do with stimulating the economy and would have been difficult to terminate once the economy was revived. Also, on Wednesday, the House Appropriations Committee, responding to personal lobbying by Vice President Cheney and an explicit veto threat from President Bush, rejected more than $20 billion in highly questionable "emergency" spending measures. That $20 billion would have exceeded the $40 billion in emergency spending Congress and the White House had already agreed upon.

The fiscal stimulus package that ultimately emerges from negotiations should be weighted in favor of tax relief. Since consumers are more inclined to spend funds made available by permanent tax cuts, Sen. Charles Grassley's proposal makes the most sense on the consumption side of the equation. For all levels of income, he would accelerate the marginal income-tax rate reductions scheduled for 2004 and 2006. In order to encourage businesses to make investments now that they would otherwise finance in later years, accelerating depreciation for investments undertaken over the next 12 to 18 months makes sense. To revive entrepreneurial activity and the venture capital markets, a meaningful reduction in the capital gains tax say, from the current long-term maximum of 20 percent to 15 percent is the answer. With the economy already in negative-growth territory, it's time to move forward with a real stimulus package.


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