Just Say "No" to Grover's Total War Politics

Anti-government activist Grover Norquist believes in serial tax cuts to (1) weaken the U.S. government, and (2) further his total war approach to Republican politics. In a front-page article in the Denver Post last Monday, he likened bipartisanship to "date rape." He wished for more political "bitter nastiness" at the state and local level.

President Bush's administration should just stop associating with this guy and his destructive, wrongheaded politics. The nation and the economy need bipartisan problem-solving, not total political war at home.

The article is worth quoting at length:

Denver Post
Rancor becomes top D.C. export
GOP leads charge in ideological war
By John Aloysius Farrell
Denver Post Washington Bureau Chief

Monday, May 26, 2003 - WASHINGTON - When President Bush gave his first formal campaign speech as a candidate for re-election last week, he cited his efforts to curtail partisan rancor and "change the tone in Washington."

But the nasty redistricting fights in Texas and Colorado are an indication, analysts from both political parties say, that the partisan divide is as sharp as ever in America, and that acrimony exported from Washington is increasingly infecting state and local governance.

The al-Qaeda threat requires U.S. political leaders to assume a certain patriotic decorum in the nation's capital. But opportunists of both parties seek any edge, and have come to view the nation's statehouses, traditionally known as more pragmatic forums, as arenas for ideological combat.

"We are trying to change the tones in the state capitals - and turn them toward bitter nastiness and partisanship," said Grover Norquist, a leading Republican strategist, who heads a group called Americans for Tax Reform.

"Bipartisanship is another name for date rape," Norquist, a onetime adviser to former House Speaker Newt Gingrich, said, citing an axiom of House conservatives.

...

Link:
Denver Post Rancor becomes top D.C. export, GOP leads charge in ideological war (May 26, 2003) (NOTE: this link expires after two weeks; however, the Post's archives can be searched for full text).

No Sellout Here: CED Focuses on the Future

The Committee for Economic Development (CED) and Concord Coalition recently released a report that is both stunningly clear, and vitally important: Exploding Deficits, Declining Growth: The Federal Budget and the Aging of America. CED's Press Release stresses (1) that short-term economic stimulus should be accompanied by long-term budget balance (2) that the budget process should be straightforward and avoid gimmicks designed to hide deficits (3) that Social Security and Medicare should be reformed (4) that defense and security spending should be as cost-effective and flexible as possible (5) that growth in non-security discretionary spending should be reduced (6) that education reform should be adequately funded, and (7) that revenue increases should be put back on the table.

The Joint Statement released by the two groups concludes: "Deficits do matter. They lower future economic growth by reducing the level of national savings that can be devoted to productive investments.... Bringing the deficit back under control will not be easy. But the longer we wait to take action, the more difficult our choices become."

Links:
Committee for Economic Development
Concord Coalition
Centrists.Org No-BS Long-Term Budget Baseline (revised 5/24/2003)

Another Gimmicky Tax Cut

It's odd that the President has to work so hard to persuade Members of Congress to be irresponsible. Congress hasn't made a tough choice on budget policy since 1997, when it passed the Balanced Budget Act of 1997, which contained some difficult spending cuts. Since then, it has been all spending increases and tax cuts: Agriculture? Sure. Defense? Absolutely. Transportation? Of course. Tax cuts for business? Yep. Tax cuts for rich folks? Big time. Tax cuts for poor folks? Why not.

So there must be something essentially wrong with the President's economic strategy if he is forced to fly Air Force 1 to the home states of undecided Senators -- Nebraska (Democratic Sen. Ben Nelson), Ohio (Republican Sen. George Voinovich), and Arkansas (Demcratic Sen. Blanche Lincoln) -- and rev up the crazies at the Club for Growth (which exists to attack Republicans who haven't drunk the purest anti-government Kool-Aid) to run campaign-syle adds in Maine and Ohio (against Voinovich and Republican Sen. Olympia Snowe), just to persuade them to be a little more irresponsible.

The Senate tax bill passed yesterday contains the usual "sunset" gimmicks to mask it true intended cost. The House bill was worse.

The President has become the cheerleader and pressure point for fiscal irresponsibility. For the next several weeks, he will look "strong" for having "won" some extra tax cut goodies, and for successfully disguising the long-term cost. But irresponsibility has a way of catching up with people, and nations.

We hope Senators refuse to vote for extensions of the sunset gimmicks in this latest hodgepodge of tax cuts (and the previous hodgepodges as well) until the President and Congress convene a high-profile Tax Reform Commission, to simplify and rationalize the tax code, and force a more serious national debate on priorities. Senator Voinovich touted such a commission as a justification for his "yes" vote on the tax cut.

However, if a Tax Reform commission is stacked with anti-tax and pro-tax wingnuts from both sides of the political aisle, it will accomplish nothing. We hope the President keeps his promise to Senator Voinovich and pushes for a truly responsible, bipartisan commission that will have the courage to sort this mess out and put America back on a more appropriate fiscal course.

Links:
Centrists.Org No-BS Budget Baseline (May 24, 2003)

Bush Should Remember the Next Generations

President Bush is engaging in the all too familiar tactic of shifting the responsibilities for reforming the nation's underfunded entitlements programs to the future. Adding to the intergenerational pressures, his administration is reducing the government revenues that will be available to help pay for needed reforms.

A better approach would be to first reform Social Security and Medicare and then couple tax cuts with offsetting spending reductions, in order to manage the economy in a generationally equitable manner.

Links:
Bush's Generational War

CBO Releases New Estimates of Number of Uninsured

The Congressional Budget Office (CBO) estimates 21-31 million people were uninsured for the entire year 1998. About 40 million were uninsured at a specific point in time in the year, and almost 60 million were uninsured at any time during the year. Given the trends since 1998, CBO estimates those figures would remain roughly valid for the current year.

The new CBO report could slightly lower the cost estimates of some proposals to cover the uninsured. The report also points out the necessity of a two-pronged strategy for covering the uninsured: (1) transitional coverage for people who have lost or are between jobs, and (2) permanent coverage for low-income working people who are unlikely to get coverage through the workplace.

Links:
Congressional Budget Office How Many People Lack Health Insurance and For How Long? (May 2003)
Centrists.Org A Bipartisan Compromise on Transitional Health Coverage (revised April 28, 2003)

FY2003 Deficit Likely to Top $350 Billion

The Congressional Budget Office (CBO) released its Monthly Budget Review last Friday. April revenues were lowest they have been since 1995, and the deficit for the first seven months of fiscal year 2003 was $202 billion. Including the defense supplemental appropriation and a tax cut roughly the size of the Senate Finance Committee package, the total deficit for 2003 is likely to exceed $350 billion, or about 3.3 percent of GDP. Deficits over $300 billion are likely to persist indefinitely. (For details and deficit graphic, see Centrists.Org No-BS Budget Baseline, 5/10/2003)

Links:
Centrists.Org April Revenues Weak: FY2003 Deficit Likely to Top $350 Billion (May 10, 2003)
Congressional Budget Office Monthly Budget Review (April 9, 2003)
Joint Committee on Taxation Estimate of Senate Finance Committee Tax Cut Package (as scheduled for mark-up on May 8, 2003)
Joint Committee on Taxation Estimate of House Tax Cut Package (May 5, 2003)
Centrists.Org Centrists.Org No-BS Budget Baseline (May 10, 2003)
Washington Post GOP Eyes Tax Cuts as Annual Events (May 11, 2003)

Bush Needs A Reform Strategy, Cannot "Run Out The Clock"

President Bush's political advisors are perilously close to recommending a "run out the clock" strategy on domestic policy prior to the 2004 election. They will advise the President to (1) insist on partisan tax cuts, (2) back away from Medicare reform and cut whatever deal is available on seniors' prescription drugs, (3) talk tough but do little to restrain federal spending, (4) use liability reform as a wedge issue to be kept alive (not resolved), (5) forget about Social Security reform, and (6) make excuses about the soaring deficits and the increasingly grim outlook for America's future finances.

This would be a mistake, if not necessarily for Bush's reelection, then certainly for his ability to govern and solve domestic policy problems in a second term.

Instead, the President should do two things:
1. Transfer his sense of confidence and optimism and resolve in foreign affairs to domestic policy.
2. Use the leadership capital he has accumulated to push a bold, bipartisan reform agenda aimed at getting results, not just scoring political points.

First: Economic confidence. Since the beginning of his administration, Bush's economic rhetoric has been gloomy. To ensure the public knows he is concerned about the economy, Bush accentuates bad economic news. He then uses economic worries as a justification for tax cuts.

As a result, this administration has set off a cycle of low economic expectations, tax cuts that don't work, more bad news, more gloom and excuses, more tax cuts, and so on.

In desperation, the Administration has begun to flail. Bush's proposed dividend tax cut seems panicky, an artificial attempt to boost the stock market. His economic team has turned over: the new guys are mostly unknown and lack credibility with the public. Bush's political advisors regard the economists as pushovers. That is why so many of Bush's economic decisions have reflected political concerns (and haven't helped the economy).

Yet the economy needs a surge of confidence and optimism much more than it needs another tax cut. Investors know taxes that go down now will just go up again later, because they can see that federal spending is not going down, and they know future federal deficits will cause economic harm and must be addressed. These rational expectations are why Bush's tax cuts aren't stimulating growth.

Which bring us to the second point: Problem-solving. Rather than talking down the economy and then offering a tax cut for every economic worry or political need, Bush should take the more difficult, but ultimately more rewarding road: reform. Medicare must be reformed, why duck the issue? Health costs and the number of uninsured will soon return to crisis levels, why wait? Personal income taxes should be simplified. As a start, we should fix the Alternative Minimum Tax (AMT), consolidate tax preferences for education and children, and dramatically simplify taxes for small investors. Simplifying corporate taxation wouldn't be enough. The corporate income tax system has grown so inefficient that it should be overhauled completely. Social Security reform remains the right thing to do, even if the worst consequences of non-action are two decades away. New security needs demand a re-evaluation of the federal-state relationship. The liability system must be rationalized -- the continued political back-and-forth isn't leading toward the predictability and equal justice we need. We cannot burden the next generation's economy with the cost of both the baby boomers' retirement and huge national debts.

Most importantly, emphasizing reforms and solving problems, rather than retreating to entrenched partisan positions, is probably the best, most durable way to improve economic confidence and optimism. Bush should reject the partisan "run out the clock" political strategy. Instead, he should ease our economic worries by working with both parties to enact needed reforms.