Maybe this is what it means to “get back to normal” in Washington. In the wake of the Sept. 11 terrorist attacks, Republicans in Congress are still trying to advance a narrow political agenda by insisting on cuts in taxes on capital gains as part of an economic stimulus package they want to rush through under the guise of an emergency.
Pumping up a shaky economy just as war breaks out would seem to be no problem. Increased government spending associated with military action becomes the stimulus, most economists would agree. In fact, the mammoth federal budget surplus that President Bush inherited is nearly exhausted already, and a return to deficit spending is all but a foregone conclusion.
For his part, Mr. Bush has a $60 billion list of new tax cuts. Laudably, it includes rebates of $300 to $600 for 29 million low-income Americans who didn't get them earlier this year, but he also wants to repeal the corporate alternative minimum tax, which keeps certain businesses from unfairly escaping taxes entirely.
The more radical elements in the President's party aren't satisfied with that though. Having already rammed through the $1.35 trillion tax cut tilted heavily to favor the wealthy, they now want to load up the stimulus legislation by advancing the income tax rate cuts due in 2004 to 2002, and cut the tax on capital gains from the sale of stocks and other securities.
On the other side of the aisle, Democrats are fashioning a New Deal-style package of all sorts of spending programs, including $75 billion to improve the security of nuclear warheads.
One Capitol Hill veteran says the atmosphere of cooperation developed after Sept. 11 is in danger of deteriorating into a partisan “food fight,” and that is most assuredly what the country does not need in this time of uncertainty.
President Bush and Democratic leaders must move quickly to put an end to this dead-end battle. They can start by making it clear that partisan agendas will have to defer to the more urgent war on terrorism.
A capital gains tax cut may be the Republican equivalent of the Holy Grail, but it'll have to wait. It can't be justified now, especially since any economic boost from such action wouldn't show up for years, nonpartisan analysts say. Furthermore, it doesn't make sense to advance those tax cuts by two years. We need to be certain there will be enough money available to fight the extended war of which Mr. Bush warns.
By the same token, Democrats can temper their urge for new spending, even if some of the programs seem worthwhile.
The terrorists have claimed enough victims. We must not let them wipe out fiscal responsibility, too.
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