Let's take care of Katrina relief expenses first

The Dallas Morning News

Many tax cuts the House and Senate are considering make sense. Some would make it easier for investors to buy and sell stocks. Some would relieve middle-class taxpayers facing the pinch of the alternative minimum tax for the first time. And some would benefit businesses and individuals whom Hurricane Katrina tore asunder.

But here's the problem: The whole package will cost as much as $70 billion.

When you also consider the hikes given this year to the Pentagon, homeland security initiatives and guaranteed programs like Social Security, the Treasury can't afford $70 billion more in lost revenue. Not if Americans want to keep the $317 billion deficit under control.

The best approach for the Senate and the House would be to break the tax cuts into separate packages. Congress should start with providing tax relief to Katrina victims by year's end. That would cost the Treasury about $10 billion. ...

Then leave work on the larger business portion of the tax package until Congress returns next year. That package, which could run as much as $50 billion, also should include a higher exemption of income from the alternative minimum tax that now pinches many middle-class families.

Part of the work is identifying how to finance a new round of business tax cuts. Just as Congress needs to show how it would pay for spending increases, it also needs to offset tax reductions.

Otherwise, we risk adding mountains of debt onto today's third- and fourth-graders, who eventually will have to pay for our budget excesses. Many Americans plan wisely for their heirs; they want to see Congress do the same.