Tax cut, budget will raise deficits, slow down the economy, and benefit wealthy at expense of poor
If you think the destruction of Saddam Hussein's regime was accomplished in record time, take a look at the U.S. federal government's budget and our country's economy.
In just two years, the U.S. has gone from having a long-term budget surplus, a strong currency, and a decreasing national debt into a country with a long-term budget deficit, a weakening currency, and soaring national debt.
We have gone from a surplus once forecast at $5.6 trillion over ten years to an estimated deficit of at least $2 trillion, a reversal of more than $7 trillion. We haven't seen a reversal that big since the Great Depression.
How did it happen?
Don't blame the recession. These projections assume moderate economic growth. If we have another recession, the deficits will be even larger.
Don't blame Saddam Hussein. The $100 billion Bush budgeted for invading Iraq is less than one-third of the 2003 deficit, and these projections do not include future invasions. Of course, if we invade Syria, Iran, or North Korea, the deficits will get even bigger.
Don't blame Osama bin Laden or the war on terrorism. Don't blame the French. Don't blame the weather.
Blame President George W. Bush and a compliant Congress — Democrats and Republicans alike. In 2001, Congress passed Bush's tax cut that gave $1.3 trillion in tax breaks to the wealthiest Americans. That was the first nail in the coffin, sending us from surpluses to record-high deficits in only two years.
Now Congress has passed a second Bush tax cut — one that will cost at least $350 billion and will, according to nearly every economist who has analyzed it, have a negative effect on the economy over the next decade.
That's right: Negative effect. That means fewer jobs, not more.
President Bush keeps calling it an "economic stimulus package," but the only economies that will be stimulated are those of his wealthy backers.
The Congressional Budget Office, Congress's Joint Committee on Taxation, The New York Times, The Washington Post, and every independent economist in the country have warned that the tax cut will reduce jobs over the long haul — not create them.
We've been here before. Bush's 2001 tax cuts were supposed to create jobs, too. Instead, we lost two million jobs over the next two years.
Sure, I am happy that the average middle income family will pay $217 less in taxes next year. I wish it could be more. They need the money.
And I'm happy that some working families will get checks for about $400 per child some time in July. I wish those checks could go to all working families with children, but Congress chose to leave workers at the lower end of the pay scale out of this tax cut.
They also chose to end this tax break in 2004, along with the tax breaks for married couples and lowering of tax rates for many working families.
Of course, the reduction of the tax rates for the highest income brackets will continue indefinitely.
But the worst part is that the federal government is going to have to borrow money to pay for these cuts. In 2003, the federal budget deficit is projected to be over $300 billion — even higher in 2004.
Borrowing to pay for tax cuts simply shifts the burden of payment from today's taxpayers to tomorrow's.
When the bill for these tax cuts comes due, some future president will have to raise taxes. It won't matter whether he is a Democrat or a Republican.
And because debts earn interest, that future tax increase will most assuredly be more than the $217 you get this year.
In the meantime, these tax cuts will give Congress and the president a convenient excuse to delay spending on programs that help working families.
Health care for everybody? Too expensive. Prescription drugs for the elderly? Can't afford them. Pension protections? We don't have the money.
And in ten years, when the full effect of the 2001 and 2003 tax cuts becomes obvious, no doubt we will hear members of Congress say, "Social Security? Can't afford it. Medicare? We don't have the money."
We won't have the money because Congress and Bush will have spent it on tax breaks for the wealthiest Americans, while our economy was losing 2,700 jobs every day.
We're in a hole. Congress and the president should be helping us climb out — not digging deeper.