Jewish World Review Feb. 6, 2002 / 24 Shevat, 5762

Jack Kemp

Jack Kemp
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Consumer Reports

Gephardt embraces tax cuts and tax simplification -- PRESIDENT George W. Bush delivered a tour de force in his first State of the Union address last week. Bringing to mind Charles Dickens' sense in "A Tale of Two Cities" that we live in both the best of times and the worst of times, the president said, "Our nation is at war, our economy is in recession and the civilized world faces unprecedented dangers. Yet the state of our union has never been stronger." Even Geraldine Ferraro, former member of Congress who was Walter Mondale's running mate in 1984, called the speech "phenomenal" on Fox News' "O'Reilly Factor."

With all the much-deserved praise for the president's address, the Democratic response given by House Minority Leader Dick Gephardt has undeservedly fallen through the cracks. The minority leader's speech was important, and it should be taken seriously.

Gephardt did the Democrats and the entire country a great service by laying out the values and principles of the "Gephardt wing" of the Democratic Party. While we may agree with some of those principles and disagree with others, I believe we all should welcome his stating them with such clarity and forthrightness because it provides the basis for reasoned debate between the parties and strengthens our democratic system.

Gephardt's speech was important for his party because it helped dispel the obstructionist image created for the Democrats by Senate Majority Leader Tom Daschle. Not only has Daschle fought Bush's effort to cut tax rates tooth and nail, he doggedly held up Bush's judicial appointments and has refused to allow the Senate to take action on some 50-odd bills already passed by the House of Representatives and supported by the president.

Gephardt repudiated the strategy of blaming the recession on Bush's tax cuts and demanding that they be delayed. Even though he voted against the Bush tax cuts, Gephardt says it doesn't make sense to talk about repealing or delaying scheduled tax cuts in the midst of a recession.

Instead, Gephardt took a different tack when he responded to the president's State of the Union address: "I refuse to accept that while we stand shoulder-to-shoulder on the war, we should stand toe-to-toe on the economy," he said. "Our (Democratic) values call for tax cuts that promote growth and prosperity for all Americans."

Now that sounds like a real Kennedy Democrat -- a John F. Kennedy, not a Ted Kennedy Democrat.

Then Gephardt took Bush's speech a step further and called for "an economic growth summit to figure out how we're going to help businesses create jobs, reduce the deficit, simplify the tax code and grow our economy." What a terrific idea. But it's not only a great idea for the country, it's a shrewd political challenge to the Bush administration, and one the president should accept.

Tax rate reductions, tax reform and tax simplification have been solid "Republican issues" since Ronald Reagan's presidency. The standard Democratic response, unfortunately, has been to play off the tax issue by waging class warfare, pitting labor against capital, claiming Republicans only want to cut taxes for "the rich," pretending that tax cuts "undermine Social Security" and lately making the bizarre claim that tax cuts worsen and exacerbate recessions.

In his speech, Gephardt may have turned a new leaf on taxes for the Democrats. It waits to be seen whether the House minority leader follows through on his stated desire to work shoulder-to-shoulder with the administration on the economy for the good of the country rather than standing toe-to-toe with the president over tax cuts in pursuit of partisan gain. If he does, then Gephardt will have taken the first important step in making tax rate reductions, tax reform and tax simplification issues with broad bipartisan support once again.

It's time to move beyond the small-potatoes "stimulus package" that has kept Congress and the administration deadlocked. The economy doesn't require short-term stimulus; it demands long-term reform. Gephardt's idea of an economic summit offers one way to shift the debate off short-term stimulus onto long-term growth, which must include consideration not only of taxes but also trade, regulations and what to do about an ever-strengthening dollar and deflationary monetary policy.

Serious-minded people from both political parties would welcome this kind of high-level summit on economic growth. Everyone would benefit greatly from the challenging debate and discussions that would emerge from it. While I am sure there would be serious disagreement over the details along the way, I also believe the country would be far better off if our political parties spent their time arguing over how to enlarge the economic pie for everyone rather than forever bickering about the "fairest" way to distribute a pie that's not growing as fast as it could.

A summit on long-run economic growth, hopefully, could be an important beginning that eventually leads to a pro-growth, pro-family tax code for the 21st century, and would be good for everyone.

Jack Kemp is co-director of Empower America and Distinguished Fellow of the Competitive Enterprise Institute. Comment by clicking here.


01/30/02: Just the facts
01/22/02: 'Been down so long it looks like up to me'
01/15/02: Confronting terror wherever it occurs
01/09/02: Daschle's war on Bush
01/03/02: Prosperity policies, not partisan politics
12/27/01: Governments create calamity, markets get the blame
12/18/01: 'Tis the season for Daschle to compromise
12/12/01: Hard choices made simple
12/05/01: Straight talk on Iraq
11/28/01: Not all tax cuts are created equal
11/20/01: Words have consequences
11/15/01: Deflationary recession
11/07/01: Consider Mideast reality in the war on terrorism
10/30/01: No 'stimulus' required
10/23/01: Good out of evil
10/16/01: Watching Iraq
10/12/01: The putrid stench of evil
10/04/01: Trade, terror and truth
10/01/01: Drive this scourge from the face of the Earth
09/25/01: Bush emerges as leader for his time
09/06/01: Middle East Madness has a chief instigator
08/30/01: It's about economic growth, stupid!
08/22/01: Phlebotomizers at the IMF
08/17/01: The Greenspan Recession
08/08/01: From Kyoto to Bonn, no science equals nonsense
07/25/01: Fiddling while the world economy freezes
07/19/01: Schundler should be New Jersey's next governor
07/12/01: Second wind for the global economy
07/06/01: An interest-rate target with no bull's-eye
06/28/01: Tax harmonization --- American-style
06/21/01: Warming diplomacy --- at what price?
06/13/01: A party that stands for nothing deserves to lose
06/07/01: No peace in the Middle East
05/30/01: Jeffords' palace coup
05/24/01: A supply-side energy plan
05/16/01: Getting Lincoln right
05/10/01: A good reason to borrow
05/01/01: Supreme Court makes racial profiling the law of the land
04/26/01: Campaign finance reform: silencing the lambs
04/17/01: Right wanted might in China case
04/12/01: How minority entrepreneurs can save the tax cut
04/04/01: Whose privacy is it?
03/29/01: A letter from Seoul
03/20/01: Ignore the double talk and double the tax cuts
03/13/01: Don't give up the bully pulpit on Social Security, Mr. President
03/06/01: Another attack on the economy
02/28/01: It's time to end deflation
02/21/01: Building blocks of humanity
02/15/01: Trumping the propaganda
02/06/01: The Gipper at 90
01/30/01: Kicking off a season of economic growth
01/24/01: The Bush tax agenda
01/17/01: Debating the Clinton legacy
01/10/01: No need for another Social Security commission
01/03/01: Truly a Golden Age, if we can keep it
12/27/00: The Grinch who turned off the holiday lights
12/20/00: Forging ahead
12/13/00: A new tax system for the 21st Century
12/07/00: Global government in retreat
11/30/00: An open letter to Fed Chairman Alan Greenspan
11/21/00: Don't forget the guy in charge
11/15/00: Civic virtue, civic vice
11/08/00: Memo to the president-elect
10/31/00: Scare tactics won't work
10/24/00: Prosperity in the balance
10/11/00: Al Gore's economics of fear
10/03/00: Al Gore IS debatable
09/27/00: Government should protect our online privacy
09/13/00: The most important issue
09/05/00: Defeating the Gore blitz
08/29/00: Workers of the world, rejoice
08/22/00: Just the facts, Mr. President
08/08/00: Reclaiming Lincoln's legacy
06/23/00: A renaissance for urban America?
06/16/00: Capital access can bridge 'digital divide'
06/08/00: Some friendly advice for Rick Lazio
05/26/00: Is the economy being saved or destroyed?
05/22/00: Immigration and the promise that is America
05/12/00: Stock market roulette or snobbery?
05/04/00: Is Rule of Law whatever we say it is?
05/01/00: Myths happen

© 2002, Copley News Service