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Spokane, Washington  Est. May 19, 1883
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Opinion

Time to rethink tax cuts, spending

The Spokesman-Review

Hurricanes Katrina and Rita have blown the facade off the federal budget and forced the nation to have a serious debate about fiscal responsibility.

In the past four years, we’ve launched the “No Child Left Behind” education reforms, started wars in Afghanistan and Iraq, poured money into homeland security and added a prescription drug benefit to Medicare.

Before that, we adopted federal tax cuts that are still being phased in.

And how did we pay for all of this? We didn’t. We thought we could have it all and pass the costs on to the next generation. Sacrifice? That was OK for the Greatest Generation, but not ours.

A trip back to 2001 reveals quaint arguments that reveal the nation’s utter lack of discipline and foresight. President Bush urged Congress to pass the tax cuts by invoking the budget surplus: “The people of America have been overcharged, and on their behalf, I am here asking for a refund.”

Then-Senate Democratic Leader Tom Daschle said the tax cuts would “consume nearly all of the surplus – at the expense of prescription drug coverage, education, defense and other critical priorities.”

As it turned out, we got both. Consequently, the surplus has turned into a huge deficit. If we were overcharged back then, does that mean we’re undercharged now? Sure it does.

We have new and unavoidable priorities. Everything has to be on the table as we figure how to pay for them. The tax cuts did help pull the country out of recession, but Congress needs to remember that it put a time limit on them for a reason: baby boomers will begin retiring soon, which will put even more stress on Medicare and Social Security.

The recent campaign to make the tax cuts permanent is yet another example of pushing long-term funding issues off on our children. Even before the tax cuts, federal taxes were relatively low. Median-income families paid a smaller portion of their income in federal taxes in 1999 than they did in 1977. Staying the course on tax cuts makes sense only if you ignore everything that has happened since.

No doubt, conservatives will be loathe to rethink the tax cuts, because they have become an article of faith in the Republican Party. But they can look to the Reagan era for reassurance. After cutting taxes in 1981, President Reagan showed leadership by agreeing to periodic increases to address growing deficits. He’s still regarded as a tax-cutting legend.

Rethinking federal spending must also be considered. The prescription drug benefit could be more cost-efficient. Transportation spending sets records every year. The bill for the Iraq War is far surpassing administration estimates.

Katrina and Rita are only the latest assaults on the federal budget. We owe it to the next generation to begin the reconstruction now.

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