With Friends Like These…
Congressional Republicans turn out to be a hard sell on Bush’s budget plan.

Mr. Levin is president of the Landmark Legal Foundation
March 5, 2001 9:00 a.m.

oy, do the Democrats hate to cut our taxes and love to spend our money.  The Democrats insist on tying cuts in marginal tax rates to actual surpluses.  They say they're concerned about creating large deficits if the surpluses don't materialize.  Of course, these same Democrats would never tie spending increases and new entitlement programs to actual surpluses.  In their minds, spending increases are a fact of life unaffected totally by actual budget and economic circumstances.  They were never concerned about deficits before — remember the New Deal, the Fair Deal, the Great Society, and all the rest of it — but now they are budget-balancing hawks.

Of course, the Democratic party is the party of big government.  We expect Democrats to oppose tax cuts and promote spending.  But the congressional Republicans are supposed to stand for something different, including limited government and economic liberty. Yet, they've bought into the Democrat argument that tax cuts must be tied somehow to budget surpluses.

  Some Republicans, who command a lot of attention in a Senate split 50-50 between the two parties, are urging something they call a "trigger," whereby taxes would only be cut if budget surpluses actually materialize.  It's unclear how this would work, but it really doesn't matter.  There's already a "trigger" mechanism that empowers members of Congress to raise taxes, if that's their desire, whether or not a surplus exists.  It's called Article I, Section 7 of the United States Constitution.  It states, in relevant part:

Every Bill for raising Revenue shall originate in the House of Representatives;    but the Senate may propose or concur with Amendments as on other Bills. …The Congress shall have Power To lay and collect Taxes, Duties, Imposts and  Excises, to pay the Debts and provide for the common Defense and general  Welfare of the United States; but all Duties, Imposts and Excises shall be    uniform throughout the Unites States…

Then there's the Sixteenth Amendment, which provides:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

Congress is not bound by any 5- or 10-year budget plan.  However, the so-called "trigger" idea is being floated for two reasons: 1. those who support it hope to appear fiscally responsible when, in fact, they're not; and 2. as Democrats learned after supporting Bill Clinton's massive tax increase in 1993, there's a political price to pay for voting to increase taxes, i.e., the Democrats lost control of Congress for the first time in over 40 years.  The liberal Republicans, who usually support Democrat spending initiatives, don't want to be held accountable for voting to raise taxes.

One of the most personally arrogant, yet politically timid Republicans is House Ways and Means Committee chairman Bill Thomas.  He's a man always ready to cut the proverbial baby in half, which he and other moderates call "the art of the possible."  Last Friday, Rush Limbaugh, citing, in part, the Wall Street Journal, criticized Thomas, among others, for failing to follow George Bush's leadership in cutting taxes. 

Thomas responded that he had, in fact, embraced Bush's tax plan.  Thomas's bill included a retroactive reduction in the marginal tax rate for the lowest income bracket — from 15% to 12%, for a total tax cut of $5.7 billion this year. 

Thomas is disingenuous at best.  The plan Thomas refers to was offered by Bush in December 1999.  Fourteen months later, the surplus is projected to increase by $5.6 trillion, which is $1 trillion more than when Bush first proposed his plan.  Moreover, the economy is beginning to tank.  Bush himself has recognized the need to act more swiftly.  As recently as February 27, 2001, in his speech to a joint session of Congress, Bush stated:

We must act quickly.  The Chairman of the Federal Reserve has testified before  Congress that tax cuts often come too late to stimulate economic recovery.  So I want to work with you to give our economy an important jump-start by making tax relief retroactive.

Bush's tax-cut plan isn't fully implemented for five years.  Thomas knows that Bush wanted to implement the first year of marginal rate reductions retroactively, so they'd have an impact now.  By referring back to Bush's original proposal, and targeting only the lowest income bracket retroactively, Thomas intends to cut taxes by less than one-tenth of one-percent of the Gross Domestic Product, which will do nothing to spur short-term economic growth.  This isn't "the art of the possible."  It isn't art at all. 

Thomas also took the occasion of his appearance on Limbaugh's show to disparage Reaganomics.  Ronald Reagan, Thomas said, agreed to $2 in tax cuts for $3 in new spending.  Read David Stockman's book, Thomas told Limbaugh.  So, now the Republican chairman of the House Ways and Means Committee parrots the most left-wing elements of the Democrat Party. 

Stockman, Reagan's first director of the Office of Management and Budget, insisted that Reagan choose between cutting taxes and building up the military.  It was a false choice that Reagan refused to make.  Stockman eventually found work elsewhere.  However, it's worth noting that the current Republican plan, once fully implemented, returns about $1 in tax cuts for $2.50 in new spending — that's $1.6 trillion in tax cuts from a projected surplus of $5.6 trillion, without including 4% or more growth already built into the federal budget.

Meanwhile, Republican Sen. Pete Domenici recently stated that Bush's 4% limit on federal spending increases next year is unrealistic.  This, of course, is precisely the kind of resistance to spending limits that Reagan faced from Democrats and Republicans throughout his presidency.  During Reagan's eight years, congressional Democrats and Republicans had every opportunity to cut spending.  In fact, Reagan asked repeatedly that they do so.  But they wouldn't. 

George Bush is a Reaganite who seeks to continue the Reagan Revolution.  It's time that Republican congressional leaders either get behind their president or get out of the way.