- The Washington Times - Wednesday, January 23, 2002

With Congress back in session, economics is likely to come to the fore. President Bush may be winning the war on terrorism, but congressional Democrats think they can recoup by blaming him for losing the surplus. This party of big spenders is ill-equipped to take political advantage, however.

Senate Majority Leader Sen. Tom Daschle of South Dakota recently went on the attack against the Bush tax program. But Mr. Daschle's charge that administration policies "probably made the recession worse" is partisan cant.

The Bush tax program hadn't even gone into effect when the economy began slowing. Moreover, virtually no economist believes in fighting recessions with tax increases. And 12 Democratic senators and 28 Democratic House members backed the Bush plan.

Nor can the disappearing surplus be blamed on the tax cut. That measure will reduce revenue by only $43 billion this year, says the House Budget Committee, compared with the once-estimated $313 billion surplus. The rest stemmed from the slowing economy and anti-terrorism legislation.

Yet after conjuring up so much supposed harm from last year's modest rebates, Mr. Daschle is unwilling to forthrightly advocate a tax increase. At least Democratic Sens. Hillary Rodham Clinton of New York and Edward Kennedy of Massachusetts have the courage of their convictions and are calling for an increase.

Instead, Mr. Daschle, the Democratic Party's nominal national leader, advocates new tax breaks, but oriented to the sort of social engineering at which Democrats excel. Yet there's no need for tax credits and government loans to promote universal broadband service, as he proposes, when 85 percent of Americans already have access if they choose.

This special interest boondoggle would never end. Decades after virtually every American has electricity and telephone service, the Rural Utility Service (successor agency to the Rural Electrification Administration) continues, subsidizing such needy areas as Snowmass and Hilton Head Island.

Mr. Daschle's lack of seriousness is even more evident in his refusal to go along with the president's plan to hold so-called discretionary spending to a 4 percent increase a year. Even excluding the $55 billion in post-September 11 emergency spending approved for 2001 and 2002, budget analyst Steve Moore figures that Congress doubled the president's proposal. Discretionary domestic outlays rose an astounding 11 percent last year.

Of course, Republicans as well as Democrats like pork. It is Democrats, however, who relentlessly push to increase spending on virtually every program. Indeed, when Congress debated the misnamed economic "stimulus package" last fall, Mr. Daschle blocked its passage for being insufficiently wastrel. He wanted to pay off Democratic interests, not protect the public purse.

There are few agricultural products that he would not subsidize: What would America do without Bison ranches, for instance? Without shame he railed against proposed corporate tax reductions, while successfully pushing to off-load a South Dakota mining concern's environmental liability estimated to run as much as $1 billion onto Uncle Sam.

Indeed, there appears to be nothing upon which Congress will not spend money. The Justice Department's appropriation includes $50,000 to pay to remove tattoos from residents of San Luis Obispo. This one can't be blamed on Mr. Daschle; it came from Rep. Lois Capps , California Democrat. Even if tattoo removal is a good means to help former gang members, why should the money come from Washington and not California or San Luis Obispo or private aid agencies?

The best economic stimulus would be to accelerate the Bush rate cuts that were delayed, largely at Mr. Daschle's insistence, for three and more years. And to make them permanent.

Rebates have no impact on future behavior. It is rate cuts that encourage people to invest instead of consume and work harder instead of play longer.

Moreover, the Bush tax cuts are scheduled to run for a decade and then disappear. This does not allow people to plan for the future, invest and take risks.

The way to "pay for" more tax relief is to simply slow federal spending. It could, and should, be cut substantially. Slash corporate welfare. Kill the endless subsidy soup-line for every known interest group. Take on entitlements. Shift the burden of defending Asian and European allies onto the Asian and European allies. Tell Americans that the government exists to fulfill essential collective functions, not enrich whomever has good access to an influential congressman.

Simply slowing growth would help. The National Taxpayers Union figures that had Congress held annual federal spending increases to 3 percent over the last decade, outlays would have been $144 billion lower in 2001. Just limit Uncle Sam to cost of living increases and surpluses would miraculously re-emerge.

The major political parties rarely stand for much. But Mr. Daschle has enlightened people about the Democrats' agenda for the United States: Taxpayer beware. Americans can do better.

Doug Bandow, a senior fellow at the Cato Institute, is a nationally syndicated columnist.

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