News item: Senate Majority Leader Tom Daschle, D-S.D., Friday blamed President Bush’s tax cut for the shrinking surplus, noting that Bush’s own budget director now says the federal government will run deficits at least until 2004, just in time for the next presidential election.
WASHINGTON – “We were on the right track four years ago, with record surpluses and a booming economy. I was proud of the road we were on,” Sen. Hillary Clinton tells Katie Couric, in her only TV interview since announcing her candidacy for president. “I want to get back on that road.”
“But my opponent doesn’t believe in fiscal responsibility,” she continues, growing more shrill. “And now, because of his reckless tax cut, we have deficits as far as the eye can see.”
“Won’t that foul woman shut up?” President Bush says, hitting the mute button.
It’s 2004, and Bush is in knots. He finally stamped out terrorism and got the recession behind him, yet his once-meteoric poll numbers are sinking like a stone.
His budget director, Mitch Daniels, walks into the Oval Office and delivers more bad news: Latest projections show an even bigger deficit.
“Darn,” Bush sighs.
The Washington Post leads with the story the next day, as other Democrats pick up the cudgel.
“The president inherited the healthiest budget ever and made a U-turn with his reckless tax cut for the rich,” hisses Senate Majority Leader Tom Daschle, standing beside House Speaker Dick Gephardt, D-Mo., on the Capitol steps. “And now, as we predicted, we have a U-turn in results.”
On the Sunday shows, Democratic National Committee Chairman Terry McAuliffe wastes no time bashing Bush.
“The tax cut was excessive,” he sneers in an interview with George Stephanopoulos, lead host of “This Week.” “Mr. Bush has proven to be reckless in managing the record surpluses we achieved in the last administration.”
James Carville, Florida Gov. Janet Reno’s former campaign manager, echoes McAuliffe on “Face the Nation.”
“It was his doggone budget and his economy, an-an-and, like ah said before, his brother, dah ex-guvnah, praised it like dey-ah was no tomorrah,” clucks Carville. “Dat dang tax cut was an unmitigated disastah!”
Bush’s pollsters report back that their budget talking points aren’t resonating with voters. They’re not buying his excuse that he inherited a recession and a war on terrorism, which together erased the surplus.
“But it’s the truth,” Bush protests.
“Doesn’t matter, Mr. President,” Karl Rove advises.
“It won’t cut through their shameless lies,” he says. “Heck, they’ve got old Clinton hand Jim Kennedy lying for Hillary, and old Gore hand Doug Hattaway lying for Daschle. And McAuliffe keeps feeding his talking points in advance to Stephanopoulos at ABC.”
Bush turns and just stares at his likely November opponent on CNN.
“It took Mr. Bush just six months to go back in the wrong direction with his tax cut for the wealthiest Americans, and to begin to squander that discipline and that hard work that it took to move us out of deficits,” Hillary tells Larry King in her second and last TV interview before the primaries.
Wealthiest Americans? Bush scratches his head. But those cuts haven’t kicked in yet … .
“And look what happened: the record boom went bust,” she added. “The Bush recession, I needn’t remind you, Larry, started in March of 2001 – long before the terrorist attacks. Americans started suffering on Mr. Bush’s watch. And now their children and grandchildren will suffer, too, since they will be the ones who will inherit the massive Bush debt.”
She then starts to make her husband’s shop-worn linkage between the budget and interest rates, but catches herself, remembering back to the fall of 2001 when mortgage rates fell to a 30-year low on news of Washington’s disappearing surplus.
So she makes an attempt at humor, instead.
“You know, Larry, when we first heard about these awful projections of Bush budget gaps, I remember turning to Bill one night by the fire in Chappaqua and saying, ‘Honey, they shrunk your surpluses!'”
King chortles, and then promotes his next night’s guest, old deficit hawk Ross Perot, before cutting to a commercial.
Deflated, the president clicks off the running nightmare.
But the picture only darkens.
The next week, citing unnamed Republican “insiders,” the Drudge Report drops a bombshell: Sen. John McCain, R-Ariz., plans to challenge Bush in the GOP primary.
This story turns out to be true, and Bush and his handlers watch in disbelief as McCain holds a press conference to announce his presidential bid.
“As you know, I’ve always supported the president. But I can’t support these budget practices. The American people deserve better,” he says. “That’s why I regretfully, but as a matter of principle, held back my vote for the president’s $1.3 trillion tax cut in the summer of 2001. It was too big, too irresponsible, particularly given all the pork-barrel items in the president’s budget, and now we’re in the hole.”
“Back-stabber,” Bush grunts in his breathy West Texas drawl.
“Don’t worry about it, Mr. President,” Rove says, trying to comfort him. “We’ll stab, er, beat him again in South Carolina.”
It doesn’t have to be this way. Bush doesn’t have to be a one-term wonder.
The antidote to this scenario lies in top marginal tax-rate cuts. Not taking them away, as Democrats want, but accelerating them. Making them real and not just promises strung out over 10 years.
The only problem with the Bush tax-cut plan is that it does little to incentivize small businesses, who do most of the hiring in the country, and who pay most of the people who file the personal-income taxes that make up most of Treasury’s receipts.
Mom-and-pop enterprises and independent contractors, who file their taxes on 1040 Schedule C forms and are subject to top personal – not corporate, income-tax rates – don’t see any real tax relief until after 2004. And even then, it’s too little.
The rich-bashing class warriors made Bush flinch. So, in the end, he signed a tax cut that looks big enough on paper to provide challengers in 2004 the rhetorical punch to make him look fiscally irresponsible, given the sadder budget picture (which actually started to worsen months before Bush raised his right hand), but not effective enough to boost revenues from the supply side in order for him to close budget gaps by 2004.
Unless and until Bush can sway Congress to agree to pay those back-loaded, high-end tax refunds earlier, Democrats – and perhaps even some Republicans like McCain – will be able to demagogue his tax-cut plan for failing to stimulate the economy, while blowing a big new hole in the budget.
“Mr. Bush should have listened to his father,” Hillary says in their final televised presidential debate. “Supply-side economics really is ‘voodoo.'”
While basking in the sustained roar from the audience, her thoughts drift to life back in the White House with so many new executive powers … detaining political enemies, er, terrorists … sniffing their e-mails without a warrant …
Again, it doesn’t have to be this way, if only Republicans would get in front of it with real cuts in marginal tax rates.
Related column:
Democrats’ seething hatred for America
Wayne Allyn Root