Tax cut fever shows fiscal restraint missing on the Hill

July 28, 1999|By Molly Ivins

AUSTIN -- Now we're in mid-battle over a tax cut, and all we can do is keep track of those folks who are losing their heads.

Gov. Tommy Thompson of Wisconsin, normally an estimable fellow, got carried away by the excitement of it all and announced in response to a radio address by President Clinton: "The Democrats, they look at surplus dollars, and they always look for ways to spend them on new programs; while Republicans see surplus dollars and they look at ways to cut your taxes." That's a hard proposition to defend with facts.

For one thing, this isn't a fight about whether to have a tax cut; it's a fight about whose taxes should be cut and by how much.

President Clinton favors a cut in the neighborhood of $250 billion to $300 billion, while the House Appropriations Committee (chaired by Rep. Bill Archer of Houston) proposes an $864 billion whopper that explodes to a $3 trillion cut in the 10-year period starting in 2010.

Further, Mr. Clinton wants to cut taxes for the working and middle classes to encourage retirement savings. Mr. Archer wants to cut taxes for the rich -- eliminate the estate tax, cut capital gains, a 10-percent across-the-board income-tax cut and a whole nasty nest of tax loopholes for special interests sneaked in by lobbyists.

Mr. Clinton wants to shore up Social Security and Medicare -- not new programs. The Republicans, in a telling move, want to pass tax cuts before they even pass this year's spending bills. Since this is the party that passed the monster highway bill from hell that broke every spending limit in the budget agreement, that's an alarming sign.

Supply side economics

Gee, I can remember when Republicans were considered the party of fiscal restraint and sanity. Of course, that was before Ronald Reagan introduced us all to supply side economics, where they cut taxes, increased military spending by $2 trillion and waited for the deficit to go away. Fixing that mess cost George Bush a second presidential term and the Democrats control of Congress.

One hates to interrupt all this political posturing with a sensible suggestion, but it actually would be a good idea to pass the spending bills before deciding the size of the tax cut. But in one of the oddities of governance that are a consequence of the Republicans' slim majority in the House, a small group of right-wing congressmen led by Rep. Tom Coburn of Oklahoma is effectively delaying all spending bills until its demands are met. What a mess.

In other considerations fiscal, Sen. Kay Bailey Hutchison, the Senate's No. 1 recipient of contributions from the oil and gas industry, wants to extend her nasty little midnight rider for two years. This, you may recall, is the rider she has put on the Interior spending bill in the past that would prevent the department from charging the oil companies market prices for drilling on public land.

Believe it or not, the oil companies pay the government and Indian tribes based on artificial prices that the companies dream up themselves. I know that's crazy; you know that's crazy. In the real world, when oil companies drill on private land, they pay the owners according to the price of oil.

This rip-off will cost the government another $130 million over the life of the rider. The states no longer let the oil companies get away with this fraud. Texas, along with other states, has successfully sued the companies for under-paying royalties and recovered about $5 billion.

No defense for this

More fiscal follies: We now learn that the Pentagon has defied the law and misused hundreds of millions of dollars on weapons systems that Congress has explicitly killed.

Meanwhile, anyone without a dog in those fights can look at the military and tell what it needs is more flexibility, mobility and pay raises. But there is no lobby for flexibility, mobility does not make campaign contributions, and military personnel who need pay raises don't have a PAC.

The defense industry, however, continues to cost us stupefying amounts of money and adversely affect the efficiency of the military because we let this miserable system of legalized bribery of our politicians continue.

Molly Ivins is a columnist for the Fort Worth, Texas, Star-Telegram.

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