"We are a different country...sadder and less innocent, stronger and more united,” George W. Bush intoned last fall. “We are renewing and reclaiming our strong American values.” That was then, this is now: With Congress and the White House back to mud wrestling over deficits, taxes and unemployment, the piousness of Bush’s post-9/11 rhetoric springs forth with the hollow authenticity of an Enron audit. The cynical politics of class warfare, corporate privilege and intellectual dishonesty that were the hallmark of the 2000 Bush campaign are turning out in 2002 to be—exactly the same.
Bush’s State of the Union address last week and budget blueprint released this week herald a nostalgic revival of the familiar economic culture of deficit spending. Expect a budget shortfall of more than $100 billion this year, and deficits through the rest of Bush’s term. The large surpluses for the next decade projected by the Congressional Budget Office have been revised downward by more than 70 percent. This economic downturn has been measured as the sharpest reversal of fiscal fortune in 50 years. Remember all that impetuous turn-of-the-millennium giddiness about finally paying down the federal debt? Fuhgedaboutit.
But for too many economists, bankers and editorialists, these numbers and forecasts are little more than self-indulgent parlor games. Who’s to blame, and whose political fortunes will suffer? What hidden philosophical meaning can we parse from Federal Reserve chairman Alan Greenspan’s recent vague, portentous backpedal from his earlier vague, portentous pessimism? How do we use an economic downturn to best advantage in mid-term elections? Can we still pin it on the Clintons? And above all, how much can we link to the war on terrorism so that meaningful dissent can be framed as an unpatriotic assault on America’s righteous crusade?
As in recessions past, the posturing and handicapping conveniently masks the real impact of economic decline: people thrown out of work; affordable housing in (perpetually) short supply; homeless shelters filled to capacity in subfreezing weather; families without health insurance rolling the dice against catastrophic illness; stagnating and decaying schools as states and cities cope with revenue crises; rising tuition for those fortunate enough to be college-bound; welfare-to-work reform that cheerfully decimated the “welfare” part, even if the “to-work” part is viable only when low-wage, dead-end jobs are plentiful.
And the answer from the Bush administration is more military spending? The new Bush budget seeks a whopping $48 billion increase next year, and an aggregate defense spending increase of more than a quarter of a trillion (yes, trillion) dollars over the next five years. With a costlier U.S. military than just about everyone else’s combined, and with congressional Democrats signaling they’ll roll quickly on defense spending, the word “excess” presumably has been deleted from our budgetary dictionary. (Silver lining: 401(k)s of Lockheed Martin and Northrup Grummon workers should do quite nicely no matter how heavily weighted with company stock.)
The elephant in the middle of the room, of course, is the massive 10-year tax cut pushed through Congress last year. Its defenders insist deficits can’t be blamed on tax cuts that have only just begun to kick in. True, most of it is phased in years down the road, but tax cuts in 2002 will equal more than one-third of the projected deficit. In the longer run, according to estimates by the Center on Budget and Policy Priorities, tax cuts will account (directly and indirectly) for over 40 percent of the $4 trillion in lost surplus through 2011.
With the Bush tax cut massively tilted toward relief for the already well-heeled, Massachusetts Sen. Ted Kennedy pitched a stunningly reasonable idea: Postpone some tax cuts (perhaps $350 million worth) for households making more than $130,000 per year—the top five percent of earners. Kennedy’s proposal—a mild corrective for Bush’s greed-infested tax policy—would not increase current taxes for a single human, nor would it affect the 2002 tax cut for high earners; it merely would reduce the size of their tax cut in 2004 and 2006. In response, the administration worked itself into a fatuous lather, asserting that delaying a tax cut is really a tax increase that the American people won’t abide. As Treasury Secretary Paul O’Neill put it, “that’s not where the American people are.”
Actually, a recent ABC News poll showed the opposite, that a majority of Americans are in favor of canceling tax cuts if it would help avert deficits. Fewer than one-third were opposed. Notably, the wording of the question addressed scrapping tax cuts broadly, not simply postponing tax cuts for the wealthy, as per Kennedy’s plan. One suspects that the “culture of responsibility” Bush celebrated in his speech last week doesn’t extend to the intellectual probity of his cabinet members.
Busy as they are misrepresenting public opinion, Republicans have sidestepped the uncomfortable fact that Bush’s brother Jeb, the Florida governor, recently did precisely what Kennedy has proposed—approving the delay of a cut in that state’s intangibles tax to help solve a revenue problem. So does that make Jeb a binging taxoholic like Ted Kennedy? “I think those are different circumstances,” riffed Vice President Dick Cheney, whose Zen-like penchant for making statements bearing no discernible relation to reality surely must be one of those “strong American values” his boss says we are “renewing and reclaiming.”
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