Fixing the economy

President-elect Barack Obama sounded more like a candidate than an incumbent this week when he talked about his plans to tighten the federal belt in addition to stimulating the moribund economy. "We're still going to have to make some tough choices," he said at a news conference Tuesday. "There are just going to be some programs that simply don't work, and we've got to eliminate them."

That's the kind of promise made on the campaign trail, where every office-seeker declares his or her determination to root out "waste, fraud and abuse." When it comes time to govern, however, elected officials find that the challenge is to spend less on services and bureaucracies that do work -- if not for everyone, at least for some entrenched constituency. And although he may save a few million here and there by pruning benefits for the wealthy, he can't make fundamental changes without overhauling or terminating entire programs. It's the difference between zeroing out farm subsidies for millionaires who shouldn't have received them in the first place and abandoning an outdated, Depression-era system that rewards agribusiness in good times and bad.

We don't mean to sound churlish. Obama deserves credit for talking about budget discipline even as the country slides into a potentially fearsome downturn. It sends a valuable message about his willingness to say no to those asking for federal help. He's preparing to seek a whopper of a stimulus package -- in the $500-billion range, according to some Democratic lawmakers -- that will nevertheless include less than some interest groups want from Uncle Sugar. As Congress decides what to include in that package, it should bear in mind the goal that Obama reiterated this week: providing not just a short-term jolt but also laying the groundwork for sustainable job creation and economic growth.

These same considerations should apply to the tax side of Obama's proposal. He reminded the public Tuesday of his wish to cut taxes for "95% of workers" and to offset the cost of stimulating the economy in part by collecting more from the wealthiest taxpayers. But today's economy is not like the one in 1993, when Congress tacked a tax increase onto its economic stimulus package. The country was coming out of a recession then; it's heading into one now. We'd welcome tax cuts that encourage businesses to expand, increase individual productivity or simply promote new spending. Some of Obama’s proposals during the campaign fall into this category, including making permanent the tax credit for research and development and increasing the credit for higher-education expenses. But the tax increases he's proposed -- measures that could reduce work and send confusing signals about the government's recovery efforts -- can wait to be debated until the worst is behind us.

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