Some Crumbs for the Poor

The Senate version of the tax cut bill is heavily tilted toward the well-to-do, back-loaded to hide its true cost and full of gimmicks. But, unlike President Bush’s or the House version, it would give middle-and low-income families with children substantial benefits.

The challenge for tax cut moderates will be at least to make sure those benefits don’t disappear. The measure is headed for a vote by the full Senate early next week, and the tax hawks get another go at it when the House and Senate versions are reconciled.

Already, Republican leaders of both houses and herds of lobbyists reportedly have been scheming on ways to skip any close scrutiny in a conference committee. Their plan is to get a “compromise,” essentially returning the bill to what Bush wants, into the Senate version just before it is voted on. Then the House and Senate versions would have nothing to reconcile. Senate Majority Leader Trent Lott (R-Miss.) makes it plain that haste is of the essence: “However we get it done, we intend to have a tax cut and stimulus package on the president’s desk by Memorial Day.”

The $1.35-trillion, 11-year tax cut package approved by the Senate Finance Committee earlier this week is a masterpiece of obscurantism. Back-loading--pushing expensive provisions late into the 11-year phase-in--and other accounting tricks have hidden the true cost of the package.

The independent Center on Budget and Policy Priorities estimates that when all the gimmicks are added, the cost will be closer to $1.7 trillion, more than what Bush originally asked for, and will rise to more than $4 trillion in the decade beginning in 2011.

The bill still delivers more to the top one-fifth of income earners than to the other four-fifths combined. But it is more generous than Bush’s original proposal to middle and low-income families with children. A single parent with two children and an income of $15,000, for example, would get a $750 tax credit; married couples earning $60,000 would receive, when all the cuts phased in, on average more than $1,800.

The tax bill that emerged from the Finance Committee is only a marginal improvement on Bush’s plan. It gives the president pretty much what he wanted and leaves little room to deal with the country’s long-term obligations to retirees. But even the small gains of the less-well-off will have to be protected.