- The Washington Times - Friday, March 7, 2003

Treasury Secretary John Snow caught an earful from "the loyal opposition" at Tuesday's House Ways and Means Committee hearing. One Democrat, apparently ignorant of the official positions of his party's leaders, demanded to know how Mr. Snow was "going to be the first secretary of Treasury in history to cut taxes while going to war." Because Mr. Snow was unable to tell another anti-war Democrat how much a war against Iraq would cost before the war was fought, the secretary was told he was making a case for his own impeachment "for incompetence." Clearly, a brief history lesson is in order.
Last fall, both houses of Congress passed bipartisan resolutions authorizing President Bush to wage war against Iraq in order to eliminate the threat posed by Saddam Hussein's weapons of mass destruction. Admittedly, more Democrats opposed the House and Senate resolutions (147) than approved them (110). Nevertheless, the resolutions drew sufficient Democratic support last year, including the votes of each chamber's Democratic leader at the time and several current Democratic presidential candidates, to qualify as robustly bipartisan.
No sooner had the bipartisan war-authorization resolutions passed (Oct. 10 and 11), than partisan debate resumed over the most effective way to stimulate the economy. Ultimately, several leading Democrats and the Bush administration offered stimulus plans. All of them significantly relied on reducing taxes. In other words, there is bipartisan agreement to reduce taxes in 2003. And, while the parties differ over the details, the bipartisan agreement to reduce taxes this year has intensified just as war against Iraq has become ever more likely in 2003. Even more interesting is the fact that all Democratic stimulus plans for 2003 far exceed the 2003 stimulus proposed by the Bush administration.
Initially proposed at $98 billion for calendar 2003 when unveiled in early January, the president's 10-year, $674 billion economic-growth and tax-relief plan was later somewhat back-loaded (wrongfully, in our judgment) to peak in 2004. It now appears that the Bush plan would deliver only $50 billion to $60 billion in stimulus during 2003, when the shooting war is expected to occur. By comparison, the stimulus plan offered by Senate Minority Leader Tom Daschle, who supported the war resolution, would cost $141 billion in 2003, including $109 billion in tax cuts. The plan devised by Sen. Max Baucus, who also voted for the war resolution and serves as the ranking member of the Finance Committee, would cost $160 billion in 2003, including about $80 billion in tax cuts. Also, House Minority Leader Nancy Pelosi, who opposed the war resolution, has offered a stimulus plan that she says would reduce taxes by nearly $100 billion in 2003, notwithstanding the imminence of war with Iraq.
Now, it is true that early in previous conflicts taxes were raised to partially finance the costs of most of America's major, multi-year wars, including the Civil War, both world wars and the Korean War. (The Vietnam War was prosecuted for nearly half a decade before taxes were raised.) However, it is also true that the federal government partially financed most of America's major wars by significantly reducing non-military outlays, exclusive of interest payments. (If any anti-tax-relief Democrats have made this proposal, it has escaped our attention.) The government pursued this policy of reducing non-military outlays during World War II, the Korean War and the Cold War-era Reagan military buildup. In the last instance, by the way, taxes were substantively reduced as well.
It is also true that defense spending during all of America's previous wars was substantially higher, measured as a percentage of gross domestic product (GDP), than defense spending will be during any war with Iraq this year. In the unlikely event that war with Iraq in 2003 raises the defense budget by one-third, or by about $125 billion, defense spending for 2003 would comprise a relatively minuscule 4.5 percent of GDP, or a little more than half the average annual percentage of GDP spent on national defense (7.9 percent) during the Vietnam War (1964-73).
Under these circumstances, given the lackluster condition of the U.S. economy and the indispensable role it plays as the world economy's locomotive, leading Democrats and the Bush administration are right to pursue a stimulus plan. The difference is merely in the underlying details.

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