Reckless Tax-Cut Proposals

When it comes to taxpayers’ money, the partisan rhetoric on the presidential campaign stump has reverted to type, with some tax-cutting Republicans facing off against high-spending Democrats.

Republican front-runner George W. Bush says that, if elected president, he will push for a tax cut bigger than the one passed earlier this year by his fellow Republicans in Congress. Democratic candidate Bill Bradley says he will spend the bulk of the non-Social Security budget surplus to bring health insurance within the reach of most Americans. Less ambitious programs are being proposed almost daily by other leading candidates, including Vice President Al Gore. They all would require spending illusory revenues and threaten to push the country back into budget deficits. This is not responsible politics.

How far Bush’s--and to a lesser degree Sen. John McCain’s--tax-cut proposal will endear the Republicans to the voters is not yet clear. GOP candidates surely must remember that in 1996 the public did not buy Republican Bob Dole’s 15% across-the-board tax cut. Or that, earlier this summer, congressional Republicans badly miscalculated when they expected the voters to rally behind their $792-billion tax cut. President Clinton vetoed the tax package amid widespread public approval of his fiscal prudence.

Public opinion polls show that most voters don’t put tax cuts at the top of their priorities. In a California survey released this month, reducing taxes ranked fifth among consumer concerns, far behind improving the state’s schooling, water supply and roads.

The Bush tax cut is not only unsound politically, it’s based on poor economics as well. Bush’s assumption is that the economy, which is already in an unprecedented cycle of expansion, will continue to grow at 2.7% a year for many more years. Few economists would dare to make such a rosy forecast. Moreover, it ignores the fact that Congress is already spending the entire non-Social Security surplus on other things.

This is largely true also of Bradley’s health care plan, which would cost taxpayers $650 billion or more over the next decade or so. Bradley too counts on surpluses generated by higher-than-expected economic growth and on Congress’ so far nonexistent fiscal discipline. Gore, Bradley’s chief rival, rightfully criticizes the health plan as irresponsible.

Neither plan addresses the country’s real problems, such as the long-term solvency of Social Security and Medicare. Both proposals are fiscally reckless and would bring back the bad old days of budget deficits.