Thursday, February 8, 2007

Bush calls for tax relief and a balanced budget

President Bush is proposing a five-year plan that will balance the federal budget without raising taxes, including making tax cuts permanent and cutting earmarks:

Over half a million jobs (513,000) have been added in the past three months alone. Our economy has now added jobs for 41 straight months, paychecks are growing, and the unemployment rate remains low at 4.6 percent. The President asks Congress to help keep our economy growing by making his tax relief permanent. ...

The Budget Restrains Spending Elsewhere By Focusing Resources On More Effective Programs, Reducing Wasteful Spending, And Addressing The Long-Term Challenge Of The Unsustainable Growth In Spending For Entitlement Programs. ... In 2005, We Had More Than 13,000 Earmarks. To help eliminate wasteful or unnecessary earmarks, the President will work with Democrats and Republicans in Congress to: Continue reforming the budget process; Expose every earmark to the light of day and a vote in Congress; Reduce the number and cost of earmarks by at least half by the end of this session.

This old-time fiscal conservative religion is wonderful stuff, but it certainly highlights the missed opportunity of Republican control of the Federal Government in 2005 and 2006. Why didn't Bush and the Republican Congress make tax cuts permanent when they had a chance?
A few squishy moderates in the Senate stalled the most important element of the Bush domestic agenda, and the leaders rolled over for it.

The reality is that almost every Republican voted for the Bush tax cuts but the Democrats voted 3 to 1 against tax cuts. President Bush is asking Congress to make permanent tax cuts on everyone who pays income taxes; double the child tax credit; reduce the marriage penalty; cut taxes on small businesses; cut taxes on dividends and capital gains; and phase out the death tax. Democrats won't do it. The first action the Democrats in the House did this month was to pass a "paygo" rule that made tax cuts harder to enact, while embracing higher energy taxes in their "100 hours" plan. The Liberal chairmen of House committees, like Rep. Charlie Rangel, are openly advocating higher taxes and think nothing of the enormous economic dislocation that will occur when they let the tax cuts expire. A Republican Congress in 2009 might have a different view, but will that happen? If it doesn't many of these provisions will expire in 2009, 2010 or 2011.

Bush also asks for the line-item veto. The President needs to use the sledgehammer of the full-bore veto on spending bills to make the point for the Congress. Another missed opportunity - earmarks proliferated and Bush signed the bills instead of holding the line on it. He can complain about wasteful spending, but until he actually vetoes it a few times, Congress will send it to his desk.

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