Jewish World Review Jan. 24, 2002 / 11 Shevat, 5762
split on Bush tax cuts
Likely as not, the tax issue also will present a challenge to Democratic presidential candidates as they define themselves as liberals or moderates.
Senate Majority Leader Thomas Daschle (S.D.) staked out what aides view as the middle-ground Democratic position Jan. 4. He declared that Bush's $1.3 trillion tax-cut plan has worsened the nation's economic outlook but refused to recommend a repeal or delay.
Daschle's logic led to the conclusion that the tax cuts shouldn't take effect, but instead he put the onus on Bush to submit a new economic plan in view of diminishing budget surpluses.
But unlike his father, whom Democrats pressured into repudiating his "No new taxes" pledge in 1992, Bush refused to play into Daschle's game plan.
Quite the contrary - he falsely accused the Majority Leader of calling for tax increases and vowed, "Not over my dead body will they raise your taxes."
In response to Daschle's speech and Bush's gibes, the 12 Democratic Senators who voted for Bush's cuts last May reaffirmed their position, pointing out the split in Democratic ranks.
Some of the 12, including Sens. Zell Miller (D-Ga.) and John Breaux (D-La.), went so far as to join the President in accusing Daschle of favoring a tax increase, which Breaux said was "the worst thing you can do" in a recession.
Then last week Sen. Edward Kennedy (D-Mass.) defined the third, most liberal Democratic position by calling for $350 billion of Bush's cuts to be "postponed" until other "national needs" are met.
Kennedy's list of "needs" - including a prescription drug benefit for seniors that his staff says will cost between $300 billion and $350 billion - certainly would require permanent postponement of the tax cuts, i.e. cancellation.
A fourth option - probably the most sensible of all - was suggested by Rep. Ellen Tauscher (D-Calif.), who called for enactment of a "trigger" that would make implementation of the tax cuts contingent on the return of large budget surpluses.
When Congress arrives back in town this week, it's almost inevitable that every prominent Democrat will be asked where he or she stands on the tax cuts.
It could be a defining issue for potential Democratic presidential candidates. Besides Daschle, only Sen. Joe Lieberman (Conn.) has addressed it at all. By saying that "Everything should be on the table," presumably he included delay, repeal or a trigger.
Sen. Hillary Rodham Clinton (N.Y.), who says she's not running in 2004, actually was the first prominent Democratic officeholder to recommend delaying the cuts last year.
House Minority Leader Richard Gephardt (D-Mo.) is planning a major economic speech this week in which he'll have to address the issue. His staff says the speech isn't written yet, but that Gephardt is likely to land "in the Daschle camp," disapproving of the Bush cuts but declining to call for their delay or repeal.
Sen. John Edwards' (D-N.C.) staff said that he, too, thinks it's "Bush's responsibility to come up with a plan." Edwards, however, has as an adviser, liberal consultant Bob Shrum, who contends that Democrats can profit politically by championing delay or repeal of the cuts.
Another leading Democratic consultant, who asked not to be named, predicted that by 2004 no Democratic presidential candidate will be able to avoid calling for one of those options because party polls indicate that the highest priority for Democratic voters - even higher than homeland defense - is protecting the Social Security surplus.
The combination of the Bush tax cuts, the recession and terrorism has slashed the projected 10-year Social Security surplus from $3.2 trillion to around $1.8 trillion.
One immediate consequence of Democratic division on taxes may be the inability of the Senate to pass a budget resolution this year, meaning that no tax or Medicare legislation can be voted under reconciliation rules requiring only 51 votes. That practically guarantees there won't be any action.
So far, the political fallout from Daschle's raising the tax issue has been hugely pro-Republican. A Gallup poll Jan. 9 indicated that by 67 percent to 28 percent, voters want Bush's tax cuts to take effect as planned.
A Gallup poll released Jan. 16 did show that by 63 percent to 31 percent, voters would not consider the cancellation or delay of tax cuts to be a tax increase. But by 59 percent to 34 percent, they said they wanted Bush's tax breaks to take effect as planned or be speeded up.
Asked which party would do a better job handling taxes, voters preferred the GOP by 52 percent to 40 percent. In terms of strengthening the economy, they also chose Republicans, 47 to 41. Asked who should have more influence over national policy, they favored Bush over Congressional Democrats by 59 percent to 36 percent and the GOP over Democrats by 47 to 44.
Democrats have gotten themselves into a fix over taxes. Maybe they can get out of it by pointing to goals that can't be met because of Bush's tax cuts, such as prescription drugs and saving Social Security.