Any way you cut it, the bipartisan passage of a sweeping tax-reduction bill is a major victory for President George W. Bush. But before the president and his Republican allies in Congress gloat, we would simply remind them that there is still the question of this nation's debt, the uncertainty of Social Security and the instability of Medicare.
The 11-year, $1.35 trillion tax package may help prop up the stumbling national economy, but it won't erase the $3 trillion-plus national red ink, it won't ensure that Social Security benefits are available when the baby boomers retire, and it certainly won't shore up Medicare. We urge the president and the Republicans on Capitol Hill to show the same dedication and commitment in dealing with these issues as they did in pushing the tax cut plan.
Although Bush did not get the entire $1.6 trillion reduction in income taxes that he had sent to Congress, essential elements of his proposal remain intact: across-the-board income tax cuts; the eventual repeal of the estate tax; relief from the marriage penalty paid by two-income couples; and, an increase from $500 to $1,000 in child credit.
In addition, the Senate version permanently extends the research and development tax credit, which Bush had proposed, and which was set to expire in 2004.
The differences between the House and Senate versions of the tax-cut bill were ironed out on Friday by a conference committee. Bush hoped to have the measure on his desk for his signature by Memorial Day.
Economic boon: The president is adamant that tax cuts will have a positive effect on the economy and will enable Americans to deal with rising energy costs. He also believes that the projected budget surpluses will materialize so that the reduction in revenue won't put undue pressure on the federal government's operating budget.
We remain skeptical. We have long believed that any budget surpluses should be dedicated to reducing the national debt and bolstering the Social Security and Medicare programs. We do not believe that the Bush plan can accomplish those things.
At the very least, Congress should have insisted on a series of triggers over the next decade that would have assured the orderly paying down of the debt. As long as it was being paid off, the American people would have received the anticipated tax cut.
But the Republican leadership ignored the trigger proposal, arguing that they believe the budget surpluses will be larger than projected.
Such optimism is not justified.
Given that the tax-cut plan spans 11 years, there will be many opportunities to revisit this issue. With the Democrats now in control of the Senate, the debate over the economic future of the nation will continue. That's the beauty of divided government.