[lit-ideas] Bush's Class-War Budget
- From: "Stan Spiegel" <writeforu2@xxxxxxxxxxx>
- To: <lit-ideas@xxxxxxxxxxxxx>, "Alisa Spiegel" <ASpi1298@xxxxxxx>, "Bonnie Spiegel" <Bonnie121W@xxxxxxxxxxx>, "Margaret Spiegel" <MSpiegel@xxxxxxx>, "David Cowen" <davidcowen@xxxxxxxxxxxxx>
- Date: Fri, 11 Feb 2005 02:19:04 -0500
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Here's a beautiful overview of the meaning of our fearless leader's new =
budget. H. L. Mencken once wrote that democracy is the theory that =
people know what they want -- and should get it good and hard! This new =
budget is giving it to us good and hard. It shows what a thoughtful =
electorate can do in voting for "the best man." - Stan
* * * * * * *
February 11, 2005
OP-ED COLUMNIST=20
Bush's Class-War Budget
By PAUL KRUGMAN=20
=20
t may sound shrill to describe President Bush as someone who takes food =
from the mouths of babes and gives the proceeds to his millionaire =
friends. Yet his latest budget proposal is top-down class warfare in =
action. And it offers the Democrats an opportunity, if they're willing =
to take it.
First, the facts: the budget proposal really does take food from the =
mouths of babes. One of the proposed spending cuts would make it harder =
for working families with children to receive food stamps, terminating =
aid for about 300,000 people. Another would deny child care assistance =
to about 300,000 children, again in low-income working families.
And the budget really does shower largesse on millionaires even as it =
punishes the needy. For example, the Center on Budget and Policy =
Priorities informs us that even as the administration demands spending =
cuts, it will proceed with the phaseout of two little-known tax =
provisions - originally put in place under the first President George =
Bush - that limit deductions and exemptions for high-income households.=20
More than half of the benefits from this backdoor tax cut would go to =
people with incomes of more than a million dollars; 97 percent would go =
to people with incomes exceeding $200,000.
It so happens that the number of taxpayers with more than $1 million in =
annual income is about the same as the number of people who would have =
their food stamps cut off under the Bush proposal. But it costs a lot =
more to give a millionaire a break than to put food on a low-income =
family's table: eliminating limits on deductions and exemptions would =
give taxpayers with incomes over $1 million an average tax cut of more =
than $19,000.
It's like that all the way through. On one side, the budget calls for =
program cuts that are small change compared with the budget deficit, yet =
will harm hundreds of thousands of the most vulnerable Americans. On the =
other side, it calls for making tax cuts for the wealthy permanent, and =
for new tax breaks for the affluent in the form of tax-sheltered =
accounts and more liberal rules for deductions.=20
The question is whether the relentless mean-spiritedness of this budget =
finally awakens the public to the true cost of Mr. Bush's tax policy.
Until now, the administration has been able to get away with the =
pretense that it can offset the revenue loss from tax cuts with benign =
spending restraint. That's because until now, "restraint" was an =
abstract concept, not tied to specific actions, making it seem as if =
spending cuts would hurt only a few special interest groups.=20
But here we are with the first demonstration of restraint in action, and =
look what's on the chopping block, selected for big cuts: the Centers =
for Disease Control and Prevention, health insurance for children and =
aid to law enforcement. (Yes, Mr. Bush proposes to cut farm subsidies, =
which are truly wasteful. Let's see how much political capital he spends =
on that proposal.)
Until now, the administration has also been able to pretend that the =
budget deficit isn't an important issue so the role of tax cuts in =
causing that deficit can be ignored. But Mr. Bush has at last conceded =
that the deficit is indeed a major problem.
Why shouldn't the affluent, who have done so well from Mr. Bush's =
policies, pay part of the price of dealing with that problem?
Here's a comparison: the Bush budget proposal would cut domestic =
discretionary spending, adjusted for inflation, by 16 percent over the =
next five years. That would mean savage cuts in education, health care, =
veterans' benefits and environmental protection. Yet these cuts would =
save only about $66 billion per year, about one-sixth of the budget =
deficit.
On the other side, a rollback of Mr. Bush's cuts in tax rates for =
high-income brackets, on capital gains and on dividend income would =
yield more than $120 billion per year in extra revenue - eliminating =
almost a third of the budget deficit - yet have hardly any effect on =
middle-income families. (Estimates from the Tax Policy Center of the =
Urban Institute and the Brookings Institution show that such a rollback =
would cost families with incomes between $25,000 and $80,000 an average =
of $156.)
Why, then, shouldn't a rollback of high-end tax cuts be on the table?
Democrats have surprised the Bush administration, and themselves, by =
effectively pushing back against Mr. Bush's attempt to dismantle Social =
Security. It's time for them to broaden their opposition, and push back =
against Mr. Bush's tax policy.=20
E-mail: krugman@xxxxxxxxxxx
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