- The Washington Times - Monday, January 7, 2002

After a decade of economic expansion, the U.S. economy entered a recession last March. The unemployment rate, which as recently as October 2000 was less than 4 percent, is now approaching 6 percent. What were interpreted as favorable reports of weekly initial-jobless claims in December have been revised upward in recent days, suggesting that the labor market continues to experience stress. Meanwhile, Senate Majority Leader Tom Daschle, who bears overwhelming responsibility for the political fiasco that prevented a fiscal stimulus package from being enacted during the final months of 2001, seems determined to ensure that things don't get much better anytime soon. His obstructionism has virtually ensured that a growth-oriented, tax-cut-centered package will not be put together in time to be of help to those Americans who lost their jobs during this year's economic downturn, which began approximately six weeks after President Bush took office and significantly worsened after the September 11 terrorist attacks.
Never one to let reality get in the way of a chance to demagogue against tax relief, Mr. Daschle, in a speech delivered Friday, glossed over politically inconvenient facts like Osama bin Laden's role in worsening the recession and sought to pin the blame on Mr. Bush. According to Mr. Daschle, last year's Bush tax cut package was responsible for worsening the recession. "Not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse," Mr. Daschle asserted. But this time, however, Mr. Daschle's war against tax relief isn't simply a jihad against Republicans. Twelve Senate Democrats voted for the Bush tax-cut package, which passed the Senate by an overwhelming margin last year; one of those Democrats is Mr. Daschle's junior South Dakota colleague, freshman Sen. Tim Johnson, who faces a difficult re-election fight this year.
Mr. Daschle appears to lack the courage of his convictions: Even he has thus far avoided calling for repeal of the 2001 tax cut. His proposed "alternative" to Mr. Bush's stimulus plan is largely a mish-mash of paltry tax cuts skewed in favor of folks who pay relatively little or no taxes (arguably a back-door version of welfare) combined with domestic spending increases for education, job training and dubious industrial-policy schemes. And, in another example of pandering to the environmental lobby, Mr. Daschle wants a "balanced" national energy policy that does not include Mr. Bush's proposal to allow needed oil exploration in the Arctic National Wildlife Refuge in Alaska. Mr. Daschle's stimulus plan is "a hodgepodge of spending increases and nearly useless tax cuts combined with contradictory rhetoric," said Chris Edwards, director of fiscal policy studies at the Cato Institute. "Daschle perpetuates an urban myth when he argues that tax cuts cause higher interest rates" because they create upward pressure on deficits. After all, Mr. Edwards told The Washington Times, "we went from a huge surplus last year to a near-zero surplus this year while interest rates have fallen. Where is Mr. Daschle's evidence that Bush's tax cut affected interest rates?"
Mr. Bush, in a Saturday appearance at a town meeting in Ontario, Calif., made it clear that he too thinks little of Mr. Daschle's bizarre view of economic reality. "There are some in Washington saying that the tax cut caused the recession. I don't know what economic textbook they're reading. The best way to come out of a recession is to say to the small business person, we'll let you keep your own money. When we cut taxes on all rates, we said to the sole proprietor or the limited partner, it's your money; you spend it in order to expand the job base in America," the president said. And, in his most forceful declaration on the subject yet, Mr. Bush added that there are "going to be people who say we can't have the tax cut go through anymore. That's a tax raise, and I challenge their economics when they say raising taxes will help the economy recover. Not over my dead body will they raise your taxes." Mr. Bush is well-aware of what happened a decade ago after his father made a similar promise, only to renege on it and end up a one-term president. This time, however, Mr. Daschle's obstructionism could make him the big loser. If he doesn't care about the human suffering that would be caused by a "Daschle recession," he may want to contemplate how he'd like becoming Senate minority leader once again.

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