Avoid the Tax-Cut Showboating : Wisely, Senate rebuffs a House effort that would set back deficit reduction

The U.S. Senate has done the right thing. It has given priority to deficit reduction over cutting taxes. In a vote Tuesday, the Senate excluded deep tax reductions from its budget bill. The stunning rebuff to the $350-billion tax-cut package that the House unwisely approved last week reflects the Senate’s more realistic and reasoned approach--especially among its Republicans--toward trying to actually balance the budget some day.

Poll after poll has shown that voters favor reducing the nation’s red ink before instituting tax cuts. Many House Republicans wanted the emphasis to be on deficit cutting, but the tax-cut package passed anyway. In the Senate, however, the GOP vote split sharply. Twenty-three Republicans joined all 46 Democrats in rejecting the House tax cut, introduced by presidential contender Phil Gramm (R-Tex.). Sen. Bob Dole (R-Kan.), another presidential hopeful, also voted in favor of the tax cut. Both were currying favor with the GOP’s conservative wing.

They, fortunately, were outvoted. Politics were put aside long enough to consider the merits of the House’s massive tax cut. That allows a welcome pause in the frenzy to ram through a balanced budget proposal. To be sure, the Senate’s own budget framework does not exclude tax cuts entirely. Its bill would earmark $170 billion for tax relief, but only if Congress made good on its promise to erase the federal budget deficit by the year 2002.

A methodical campaign to reduce the deficit while at the same time reducing taxes would be burdensome, especially if the economy stalled. But an emphasis on deficit cutting would help to reduce interest rates and reduce borrowing costs for government, businesses and consumers. In the long run, that would pay off far better than an initial round of tax cuts.

Here in California, Sacramento also is being careful about moving hastily on a 15% tax cut--being pushed by Gov. Pete Wilson, who also is a presidential contender. His plan for a 15% reduction has faltered in both houses of the Legislature.

For both the nation and state, getting out of the red should be priority one--not phony tax cuts that neutralize deficit reduction while putting only a few vote-buying dollars into taxpayers’ pockets.