Here's what the Republican Congress thinks about fiscal responsibility: Confronted with the exorbitant costs of an over-extended war, two catastrophic hurricanes and a massive budget deficit, it cut taxes. Mainly for wealthy people.
The Bush administration, continuing its perplexing effort to establish itself as the most fiscally reckless crowd to run the government in generations, thinks this is a good idea. Question: What in the name of William F. Buckley is conservative about spending money you don't have?
Consider: Outgoing Federal Reserve Chairman Alan Greenspan recently warned that the federal deficit could help disrupt the global economy. Bruce Bartlett, a former economic aide to President Ronald Reagan and devoted "supply-sider," turned against President Bush and recently told the New York Times that tax increases are "absolutely inevitable."
Against that backdrop, the House recently voted on party lines to complete a $95 billion tax cut package. The largest component is a $20 billion extension of existing reductions on stock dividends and capital gains. This week, meanwhile, it approved a budget that cuts Medicaid, student loans and other entitlements while shielding pharmaceutical companies and private insurers from the need to help reduce taxpayer costs.
The real tax-cutting work in Congress should have been to adjust the Alternative Minimum Tax, which was meant to ensure that the wealthy pay some taxes. It didn't get done. As to the extended breaks on dividends and capital gains, let Rep. Sherwood Boehlert, R-NY, make the case: "I think the argument is pretty good that it is going to the top 1 percent of wage earners at a time when we are struggling to find money."
The Senate passed a more restrained tax cut bill that allows the break on dividends to end. Assuming a federal tax cut is needed at all -- it isn't, except to fix the AMT -- this is more responsible. Thus, the Bush administration opposes it. As Butch Cassidy asked in the 1969 movie: Who are these guys?