W. Gets His Win

by David Corn

When Bush signed the tax-cut bill on Thursday, he could have declared total victory and flown off to Crawford to kick up his heels for the next three-and-a-half years. Heck, he could have resigned the presidency and let Dick Cheney have fun managing the mopping-up operations.

With the passage of the tax legislation, Bush not only succeeded in handing hundreds of billions of dollars to America's wealthiest (37.6 percent of the tax cut goes to the top 1 percent), he defunded the federal government. Poof! There goes the entire surplus.

No money for any major programs not already in existence. So, no money for prescription drug care for the elderly, no money for rebuilding schools, no money for redressing the growing gap between rich and poor, no money for a full-throttle alternative energy drive. Bush will even have trouble finding a spare dime for the $100 billion-plus missile defense program he craves.

Congress and the White House claim the tab of the tax bill is $1.35 trillion. But if you take away the various accounting gimmicks and add in the increased interest costs spurred by the tax cuts, the real cost is closer to $2.3 trillion dollars over 11 years, according to the Center on Budget and Policy Priorities. The budget surplus for this period is projected at $5.6 trillion or so. But over $3 billion of that will come from Social Security and Medicare taxes, and Democrats and Republicans have agreed those bucks will not be touched for the tax cuts or for spending. Consequently, the non-Social Security surplus estimate is about $2.1 trillion, the CBPP estimates. (Another budget-watching group, the Concord Coalition, puts the figure at $2.2 trillion.)

It gets worse: because the tax cuts are, as they say in Washington, back-loaded, they will cost twice as much -- $4.3 trillion -- in the 2012-2021 period. The crafty Republicans did put a sunset provision in the bill, under which the major tax cuts will expire in 2011. But this was done not to provide future legislators the opportunity to reconsider the deep tax cuts. The point was to jiggle the books to make the tax cut look as if it could fit into the $1.35 trillion slot available under the budget legislation. Already, conservative Republicans in the House are promising to introduce legislation later this year to kill the sunset mechanism.

Assume the cut-off survives the efforts of the sunset-killers, will the presidential candidates of 2008 and the political leaders of 2010 permit these tax cuts to end and, in essence, accede to what will be portrayed by Republicans and conservatives as a whopping tax increase? Hardly. Even then politicians will remember what happened to Democratic presidential nominee Walter Mondale in 1984, when he levelled with the public and said the next president would have to raise taxes to address rising deficits.

Moreover, in Democratic establishment circles, it has become an article of faith that the Dems lost control of the House and Senate in 1994 to Newt Gingrich and the Republicans because they courageously dared to raise taxes to reduce the deficit during President Clinton's first year in office. This is a simplistic view. The 1993 tax hike only socked it to the rich, and other matters -- such as Clinton alienating union voters by embracing Nafta -- affected the 1994 contests. Still, this we-paid-for-our-bravery line has become embedded in Democratic groupthink. Allowing the Bush tax cuts to expire will require more spine than the average Democrat possesses.

So the big game is done. Bush slam-dunked his way past the Democrats. The other day, I was on the metro (that's what we call the subway in Washington), and I ran into Grover Norquist, one of the master-plotters of the right, who coordinated the conservative coalition that pushed for the tax-cut bill. A naturally ebullient fellow, he was happy to share his delight with me. "How did [Senate Democratic leader Tom] Daschle and the Democrats let this happen?" he asked with glee. "Don't they know what we did? We took all the money -- all the money -- off the table and said, you can't touch that. It's gone. What's left is just the Social Security surplus, but the Democrats are the ones who have insisted that these funds can't be used for anything else. Fine by me. They've boxed themselves in. A trap of their own making. It's over." Yes, checkmate, in a sense.

And here's a reminder: a dozen Senate Democrats -- one out of four -- voted for the tax cuts. (After Democratic Senator Dianne Feinstein of California voted aye, several center-ish House Democrats in her state, who were leaning against the tax cut, decided to vote for the package. They did not wish to provide future GOP challengers an easy piece of ammunition: you voted against tax cuts supported by Dianne Feinstein?!)

Only two Republicans -- the Jeffords-ish Lincoln Chafee and the moving-left John McCain -- voted nay. So much for the other so-called moderate Republicans of the Senate. Olympia Snowe, Susan Collins, Arlen Specter -- they are joined cheek-to-cheek with the extremists of their party on the number-one economic issue in American politics.

There are serious issues of contention that will arise during the rest of the Bush presidency. His lieutenants vow that it is full -speed -ahead for his mandate-free proposals, such as privatizing Social Security. The Jeffords-enabled Democrats in the Senate can try to torpedo Bush, and they will launch their own attacks, as they attempt to pass measures that enact a patient bill of rights and boost the minimum wage. But Bush has bagged the number-one prize: the surplus. It's been wrapped and sent off to his campaign contributors. What a great investment those $1000 donations were.

Having achieved this triumph, Bush might even find the Jeffords defection convenient. As a senior GOP aide in the House says, "I was glad to see Jeffords do this. Now, with the Democrats controlling the Senate, Bush will be less able to push the more extreme portions of his agenda. A Democratic Senate is not only a useful foil for him, it's a natural brake on things he might try to do that would actually pisses off voters. That will help him at reelection time. I am really quite pleased. I just can't say so publicly. And, best of all, we already have our tax cut. That's what we wanted the most."

Control of the Senate, or control of several trillion dollars? I know which I'd rather have.