This was the lead in Friday's Washington Post editorial regarding the economic stimulus package which is stuck in Congress:
"The Senate's self-styled centrists have made an economic stimulus proposal that may well result in a signing ceremony, but not much useful policy. In their reach for a deal, they have dropped the worst of the provisions the administration has been pushing, but also the best of those on the Democrats' list."
A fair person would have to read this as: Anything the President wants is, by definition, bad. Anything Tom Daschle and the labor unions want is, by definition, good.
When the Senate's Centrists - led by Louisiana's John Breaux leading the Democratic side, and Maine's Olympia Snowe guarding the GOP's flanks - came up with a tax package earlier this year which was far different than the House-passed version, we remember the press corps all but hoisting what were then the clear-thinking centrists; the doing-good-things-for-America centrists; the why-doesn't-everyone-listen-to-them-and-pass-their-very-excellent-bill centrists upon their shoulders and marching them around the Capitol grounds in celebration.
The Washington Post and its allies want the stimulus package devoted exclusively to tax rebates for those whose largest tax bite is payroll taxes (Social Security and Medicare), and to extended unemployment insurance.
Nothing terribly wrong with either one, but they should be labeled for what they are: In the first case it is a long-sought income transfer from those who pay income taxes to those who do not. The money which goes to the lower-income people will not come out of the Social Security trust funds. It will come out of the general fund.
If the reasoning for this is to boost consumer spending, then it is not necessary. It looks to me that every person who has cancelled a trip on an airplane has decided, instead, to travel to a mall.
On the second point, a short-term increase in unemployment benefits makes sense from both an economic and a political standpoint. But we should be very wary of finding we have reinstated the welfare state in the guise of having supported the establishment of a permanently unemployed class. This is the government equivalent of "giving a man a fish."
The proposed tax benefits for major corporations - a retroactive refund of the Alternative Minimum Tax - would make a much greater difference in the "teach a man to fish" sense. Corporations, given millions of dollars of new-found operating funds, will be able to invest in rehiring trained employees who have been laid off, who will then have the wherewithal to go shopping on a regular basis, thereby buying goods and using services provided by those very companies who will then find it necessary to hire more workers.
It would also provide larger corporations the funds necessary to re-start programs which utilize outside vendors - very often small businesses. These programs have been severely cut back or completely halted. This tax relief would have both an immediate AND a long-term positive impact on the economy.
The Alternative Minimum Tax was an admission of laziness on the part of the Congress. The thinking was: There are too many loopholes in the tax code which allow large corporations to reduce their income tax burden to near zero. So, rather than closing those loopholes, the Congress passed the AMT which requires they pay SOME tax no matter how convoluted the tax code may be - a tax code in which every syllable was approved by the Congress.
In addition, those who are anti-corporation from the get-go, never mention the fact that larger corporate profits translate into larger dividends to their shareholders which are TAXABLE to those shareholders.
Here's a shocker: The gummint gets its piece one way or the other.
By the way, this is a fair fight. To hear the media describe it, this battle is being fought by corporate lobbyists in their $1,200 suits on one side, against Norma Rae in coveralls and Ma Joad in a housedress on the other.
In reality, the Labor lobbyists' limos are indistinguishable from the Business lobbyists' limos, both on Capitol Hill and in front of Morton's or the Palm.
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