KINDER'S COMMENTARY: SLOWDOWN COMES WHEN TAXPAYERS ARE HIT -- AGAIN

Americans need a tax cut. And a timid Republican Senate, many of whose senior members are balking on this House-passed measure, poses the greatest danger to successful consolidation of the historic Republican gains last November's elections.

"Evidence is mounting of an economic slowdown," declared the June 5 issue of Forbes magazine, which hit the streets some three weeks ago. The evidence cited: Unemployment claims for April jumped 2.8 percent to an average of 351,750, April retail sales were off 0.4 percent and domestic auto sales were off 7.5 percent. Although long-term interest rates have dropped recently, economic consulting expert Neal Soss of New York says they're still too high. "Without cuts in interest rates to increase household cash flows to encourage consumers to spend, the economy will likely stay in a downturn."

Those numbers are nearly a month old. Since then, those warning of a slowdown point to fresh evidence. The June 19 edition of Forbes states, "New housing starts in April 1995 were 17 percent below the 1994 level. The market for existing homes is also sluggish: Only 294,000 such homes were sold this past April, compared with 371,000 in April 1994. During this period, the median selling price for a new home fell 0.6 percent."

Nor is that last ominous warning -- falling home prices, reminiscent of those that defeated a president named George Bush -- the whole story. House Majority Leader Dick Armey this week cited still more evidence, including the fact that the index of leading economic indicators, designed to predict future economic activity, fell for the third straight month, the first time since the 1990-91 recession began. More from Rep. Armey: "The U.S. economy lost 101,000 jobs last month, the biggest drop in more than four years. This decline was spread across all sectors of employment, and the manufacturing sector shrank for the first time in 18 months. The dismal May numbers follow an April that saw the sharpest drop in factory orders in nine months and unemployment increase to its highest level since October 1992."

Forbes publisher Steve Forbes summarizes: "The economy is faltering, and it's no secret why: increased interest rates and increased taxes." Rep. Armey asks the pertinent question: "What could account for" such dismal numbers in so many economic categories? His answer: "The Clinton tax bill, which came due in April. Remember, the Clinton income tax increases were passed in 1993, became law in 1994 and came due in April 1995."

Ditto for Show Me State taxpayers. Recall a similar chronology with Gov. Mel Carnahan's sharply higher taxes on working Missourians, both on real property and income. Senate Bill 380's higher taxes were passed in May 1993, became law later that year, with the bill coming due in April of this year. Economic slowdown is nearly inevitable when working people get hit with repeated tax-hiking blows of this magnitude.

Publisher Forbes, who is considering entering the GOP presidential nomination contest because no current candidate is effectively making the case for lower taxes, supplies the remedy to an economy reeling from all these blows: "Pass a pro-growth tax cut."

Rep. Armey and potential candidate Forbes are right. "The real issue is posed by Rep. Armey: Who is better able to make choices -- families or big government?"

~Peter Kinder is the associate publisher of the Southeast Missourian and a state senator from Cape Girardeau.