Sacrificed to a Tax Plan

Although the U.S. economy runs largely by itself, it is greatly influenced by government actions. When the economy is in a funk, as it is today, those actions traditionally include national leaders’ reassurances that things are not spinning out of control and that remedies are on the way. So far, the Bush administration has failed miserably in building public confidence. Rather than showing urgency and fostering a consensus in Washington for a quick stimulus package, President Bush is crisscrossing the hinterland campaigning for a tax cut that is too large and will be too slow in coming to do the sagging economy much immediate good.

Bush is not even pretending he feels the pain of the investors who have lost trillions of dollars in the stock market meltdown. True, he has toned down his doom-and-gloom rhetoric in response to public criticism, but he makes it abundantly clear on the stump that the accumulating evidence of a struggling economy is a mere backdrop for his tax cut campaign. And when he says he worries about lights going out in California, he is angling to open protected lands to drilling for oil and gas.

Meanwhile in Congress, House Republicans--aided by a score of Democrats--hurriedly pushed through a series of tax cut measures last month that if enacted will put in place much of Bush’s $1.6-trillion package. At the same time, the House GOP last week rejected a proposal by a group of Senate Democrats to pump $60 billion--about two-thirds of this year’s anticipated surplus--into the economy quickly by giving taxpayers a one-time rebate.

Bush said he would accept the rebate--but only if it were part of his overall proposal. As he said last Thursday, and many times before, “We’ve got to have long-term relief as well.” But it is the long-term effect of Bush’s tax cut package that worries budget analysts most.

A recent Brookings Institution study showed that the Bush tax plan--conceived a year ago largely from political, not economic, concerns--would dissipate the entire surplus over the next 10 years, leave no room for new programs and force the government to dip into both Medicare and Social Security surpluses. Not only would it not do much good now, Bush’s economic plan could do a lot of harm by upending the government’s long-term fiscal balance.

Right now, what Americans need, and aren’t getting, is a dose of confidence stemming from political leaders being in control.