Tom Power - July 25, 2005
Tax Cuts
July 25, 2005
KUFM / KGPR
T. M. Power
Funding Tax Cuts for the Rich by Cutting Food and Medical Care for the Poor
Congress is busy wrestling with President Bush’s budget. One can be sure that the results will not be pretty. Bush wants to make his earlier tax cuts permanent while also fulfilling a promise to cut in half the annual federal deficits he has been running up. If taxes are going to be reduced and the ballooning deficits that have characterized his tenure in office are going to be controlled, clearly federal spending on various programs is going to have to be cut. That creates serious political problems for Bush.
One reason that Bush has done so well politically over the last five years is that he has played the role of Santa Claus or the Fairy Godmother: Distributing gifts while asking for no sacrifices. Unlike all presidents before him, he insisted that we could have both guns and butter. We did not have to raise taxes to pay for an extended war of indefinite duration. In fact, we could cut taxes so that Americans, rather than reducing consumption so that war materials were available for our soldiers, could expand their consumption and live the fantasy that we really were not at war.
For our soldiers and their families that often meant privately purchasing body armor, two-way radios, and night vision goggles that the military neglected to provide the soldiers. Soldiers in the field, meanwhile, picked through dumps and destroyed enemy equipment in order to armor their vehicles against the insurgents’ weapons, something one would have expected the military to have done before sending these young people to war.
Bush’s position has been that we do not have to make choices about how to use our resources. We can have our cake and eat it too. We can cut taxes, expand civilian consumption, and fight a multi-pronged war. All we have to do is go borrow the money, largely from foreigners, including the Communist Chinese government. Federal deficits, once considered an economic curse by conservatives, now, to the neo-conservatives, apparently, do not matter.
This has allowed Bush to ask for no sacrifice from the American people (except for the soldiers suffering and dying in Iraq and Afghanistan). When your policies are focused simply on giving away presents, it is not surprising that you may generate a certain amount of popularity.
One of the reasons that Bush stumbled so badly on Social Security reform was that he was forced to admit that his privatization strategy would require the cutting of the benefits Social Security provided. He was not offering a supplemental retirement program that would be in addition to conventional Social Security, but a program that could be financed only if conventional Social Security was cut back significantly. In other words, Bush was no longer passing out presents with a smile on his face. He was proposing to fund a new, untried, program by cutting an old and familiar one. Stepping outside of his role as sugar daddy, Bush stumbled badly.
That may happen with his budget too although he and his allies in Congress have tried to structure the budget process to avoid having to talk about what things actually cost. Rather than explicitly linking spending decisions to revenue decisions, the way any normal family or business would have to do, Bush wants the permanent extension of his tax cuts to be taken up first, before the expenditure side of his budget is wrestled with. That way he can again pose as the fairy godmother providing gifts to American taxpayers. Only later will the price tag associated with those tax cuts, namely cutting or eliminating significant federal programs be discussed.
Those program cuts, however, are going to have to be steep and extensive if the target of cutting the annual deficit in half is seriously pursued. Bush has proposed making deep cuts, for instance, in farm programs and federal support for Amtrak passenger rail service. Of course, those regions that depend on those federal programs are already howling loudly and congress has begun to respond by restoring those funds, even expanding the programs. Bush has resorted to threatening vetoes of spending bills if his harsh fiscal medicine is not accepted.
Support programs for low income families are also on Bush’s chopping block. With “welfare” programs dramatically restructured, the remaining low income programs do not benefit only those living in poverty; they are crucial lifelines to low income working families and their children. As food insecurity and demands on food banks have risen, startling Bush is proposing to disqualify large numbers of low income working families from food stamps. As the number of uninsured families continues to rise, Bush has also put the medical insurance programs for low-income households and children, Medicaid and the Children’s Health Insurance Program, on the chopping block.
There is clearly an amazing amount of political perversity here: While continuously talking about “family values,” Bush pushes tax cuts that overwhelmingly benefit the very well-to-do and proposes to fund those gifts to the rich by cutting food programs and medical care for low-income working families and kids.
But the link between the tax cuts and the program cuts is being discreetly hidden. We can only hope that Bush and his allies will do as badly in this exercise of political hypocrisy as they did on Social Security.
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