Bush tax cut is still good for the economy

With the turn of the calendar, the election-year debate over the nation's economy has begun.

Democrats, led by Senate Majority Leader Tom Daschle, say the tax cut President Bush pushed through last year helps explain why the federal government is now facing a budget deficit after several years of mounting surpluses. In a major speech on the economy the first week of the year, Daschle also claimed that Bush's tax cut helped to send the economy into recession.

The tax cut was the centerpiece of Bush's first year in office, at least prior to Sept. 11, and a signal success for him and for America. Our principal reservations about it are that it wasn't large enough and that its tax rate reductions, such as they are, were phased in gradually through 2006. If left in place, it is entirely possible that the principal benefits of the tax cut could occur in the first term of, say, President Hillary Clinton.

Which raises an interesting question: If the tax cut is so bad, so damaging to the economy, why then surely Daschle wants it repealed, right?

The answer is no.

Daschle specifically stopped short of advocating repeal, and will bring no such effort to the floor of the U.S. Senate, where he controls the flow of business.

The reasons for this are simple and fascinating.

Begin with the number 12. This is the number of Senate Democrats who joined Republicans in voting for the tax cut. These include Missouri's freshman Sen. Jean Carnahan and others up for re-election this year, many from states like Missouri that President Bush carried easily in 2000. Another of these is Daschle's South Dakota colleague, Democratic Sen. Tim Johnson, who faces a strong challenge from a popular GOP congressman.

Daschle's line isn't going down well even inside his own party. Sen. Zell Miller, the moderate Democrat from Georgia, said: "Maybe it's at a level my brain can't reach. How do you have as one of your priorities to re-elect the moderate Democrats from South Dakota, Montana and Missouri on one hand, then on the other hand blame them for voting for a tax cut that he maintains has created this recession?"

Hello? Daschle's line is economic illiteracy. Tax cuts don't cause recessions, they help us get out of them. Any effort to repeal or slow down the Bush tax cuts would be a de facto tax increase. It is good to see the president showing some willingness to fight on this issue.