Even as the House prepared Thursday to bestow a party-line passage on George W. Bush's $900-odd billion marginal rate reductions, a major pocket of bipartisan opposition to the President's overall tax-cut plan reared its head in the Senate. A centrist clutch of five Republicans and six Democrats banded together Wednesday and demanded a trigger a legislative clause that would halt tax cuts if the government ran out of surpluses as the first condition of their support.
Bush can blame Alan Greenspan for this one. The trigger was something the Fed head spoke of approvingly in his January testimony before the Senate. It was lost in the fireworks of a rather shockingly hearty endorsement of using tax cuts to drain off unwanted surpluses, but with Greenspan cutting back on his cheerleading and the Democrats feeling their oats, the idea has returned in a big way.
Greenspan liked the idea as an insurance policy against an unexpected and prolonged economic downturn, which is exactly how the 11 moderates who just made Bush's list Republicans Lincoln Chafee, Susan Collins, Jim Jeffords, Olympia Snowe and Arlen Specter, plus Democrats Bob Torricelli, Evan Bayh, Thomas Carper, Dianne Feinstein, Mary Landrieu and Debbie Stabenow have seized on it. If the projections go sour, they reason, a tax cut on autopilot could cut into debt reduction and shove the federal government back in the red.
A spending trigger?
To Bush, it sounds like a big fat loophole. A lame economy isn't the only way the surplus projections can go south an increase in government spending would do the trick just as well. And when Bush hears a Democrat talk about making sure there's money for "necessary programs" in 2005, he figures he knows what they mean: Hello spending, bye-bye tax cut.
For Bush, the very Reaganesque side benefit of "returning money to the people" is that it puts government on a diet. But taking money off the table works only if you actually take the money off the table. That's what went wrong with the Reagan years big tax cut plus big spending equals big deficits and the Jeffords crowd deserves credit for putting a balanced budget at the top of their list.
But Bush is right to be worried about how it gets balanced. Congress has shown unequivocally over the past few years that there's no budget legislation it can't creatively account its way around, and no bit of pork it can resist squeezing in for the folks back home. Imagine what would happen with a "trigger" giving representatives more or less explicit permission.
The worst of both worlds
You want a safety net? Try 2002, or 2004, or 2008 or 2012. The U.S. government already has a trigger it's called an election. And if Bush's tax cut starts to run up deficits because either it or the rest of the budget is too expensive for the economy it depends on, politicians on both sides of the aisle will have plenty of opportunities to figure out which they want to trim and do it.
Yes, Bush's tax cut comes with a congressional diet. So would Tom Daschle's, albeit a higher-calorie one. A trigger, meanwhile, would be little more than a license to pig out.
Remember, those surplus projections come with a diet too. The CBO's rosy forecasts lowballed economic growth and productivity enough to put them on pretty firm ground. What trigger proponents are saying is that the third component of the projections growth in discretionary spending was hopelessly optimistic, and they can't be trusted to stick to it.
Which may in fact be a realistic appraisal. But should Congress be giving up on its diet before it even starts?