J. C. Watts Explaining the 2001 Tax Cut – While Robert Rubin Trumps Dick Cheney
I wanted to follow-up on a couple of aspects as to my post noting Dick Cheney hoping people would save more.
First of all – one of our readers is now saying Bush and his allies never said that the Administration wanted to give people their money back so they could consume more. Yes – Bush said many times that he wanted to give us our money back EVEN THOUGH his government kept on spending it. Then again – most folks see rising debt as deferred tax liabilities so this White House has not kept its promises to give us our money back. But check out this Crossfire transcript from October 4, 2001:
WATTS: But Bill, I did hear you and Charlie saying that that tax relief package was too big. That — I have to disagree with that, simply because if 68 percent of the economy is driven by consumer spending, it’s healthy and it’s good for the economy to give people their money back to buy appliances or to buy food, to buy clothes, to help with house payments. That’s a good thing, and I think, you know, what we see ourselves drifting into post-September 11th — boy, let me tell you, that was very prophetic that we passed the tax package when we did. That’s good for the American people.
RANGEL: Suppose I agreed with you and said that it’s consumer confidence that we’re after, and we have to get that money out there. Why then would the Secretary of Treasury say that we ought to accelerate the tax cut with the middle income and why would Mr. Armey and Mr. Thomas talk about capital gains tax cuts? Talk about tax cuts for accelerated depreciation and expensing variety of things for the corporations. They’re not really investing, because they can’t get rid of the goods they have. So half of the stimulus package is a business package that the Republicans had before we went to war.
Rangel is a Democrat who was hoping for a more effective aggregate demand stimulus back in October 2001, while Watts was a Republican Congressman echoing the White House line. Back that was a while back. So why is Dick Cheney still supporting tax cuts – this time for the long-run?
“The American dream begins with saving money and that should begin on the very first day of work,” Cheney told a conference here exploring how to encourage people to boost savings and be better prepared for retirement. Too often, workers are living paycheck to paycheck and are not saving sufficiently, Cheney said. Last year, Americans’ personal savings rate dropped to its lowest point since the Great Depression. The dismal state of savings comes as a big wave of baby boomers will soon start retiring. That wave of retirees will eventually put massive strains on government resources as people draw on Social Security and Medicare benefits, Cheney said. Fewer workers, meanwhile, can be counted on to help bankroll the retirement program. “With an aging population, and a steadily falling ratio of workers to retirees, the system is on a course to eventual bankruptcy,” the vice president said … “There will always be a wagon load of excuses for ignoring the problem of entitlements,” Cheney said. “But Americans have a right to expect more out of the nation’s leaders, especially when it comes to Social Security and other defining national promises.”
Now making this speech takes a lot of gall coming from a White House that massively increased expected future entitlements with its overly expensive prescription drug benefit and even more massively reduced expected future taxes with its irresponsible tax deferrals, which they’d like to turn into permanent tax cuts. But as far as I can tell – the only way that Dick Cheney intends to reduce the fiscal fiasco of his own making is to eliminate your future Social Security retirement benefits even as the government still collects payroll taxes. Of course, this would make those who main form of savings is their payroll contributions to the Social Security program Cheney hopes to destroy worse off – not better off.
Robert Rubin is correct:
Former U.S. Treasury Secretary Robert Rubin urged fellow Democrats to reject President George W. Bush’s plan for a bipartisan commission to examine solutions to the mounting costs of Social Security and health care. Rubin, who served in President Bill Clinton’s administration, said Democratic leaders in Congress should instead insist Bush join them in a “fiscal commission” to discuss all options for cutting the budget deficit, including rolling back Bush’s tax cuts.