Posted on 04/21/2003 1:16:16 PM PDT by bruinbirdman
Even as conservative groups are running advertisements suggesting recalcitrant Republican senators are un-American, Treasury Secretary John Snow is hinting to The Wall Street Journal that he would settle for half the dividend tax break proposed for this year if Congress agreed to eliminate the tax entirely over the rest of the decade.
The Bush Administration tax cut plan had been priced at $726 billion over ten years when it was proposed in January. It has since been scaled back to $550 billion. But the U.S. Senate may not be willing to pass anything in excess of $350 billion.
The downscaling of ambitions has been seen as an attempt to win the support of moderate senators in both parties who are balking at tax cuts when the federal budget deficit is expected to grow beyond $300 billion this year. The major difference between the original plan and the revised plan is that several tax law changes will be phased in over time, according to USA Today, citing senior administration officials.
For example, instead of the tax cuts being retroactive to Jan. 1, none would kick in until after President George W. Bush signed them into law later this year. Instead of eliminating the income tax on stock dividends immediately, the plan would phase the tax out over five years. Instead of increasing the child tax credit from $600 per child to $1,000 immediately, the administration would do so gradually...
...In any event, all the tax cut numbers are misleading in the sense that any current plan is backloaded. While the White House wants credit for at least half-a-trillion dollars in cuts, the vast majority of those cuts will actually be delivered--assuming no intervening tax law changes--after the first George W. Bush Administration ends, or even after the president's second administration. The short-term numbers tend to get lost in all the talk of ten-year plans.
According to a Congressional Budget Office (CBO) report done in May 2002, of the existing budget proposals, the new tax laws and proposed spending plans--compared to baseline projections--would increase the federal deficit by $41 billion in 2003, but by $138 billion in 2004.
By 2005, the CBO projects a decreasing deficit in either scenario. But the baseline deficit would be $123 billion, while the deficit under the president's plan would be $270 billion. By 2009, the CBO projects a $61 billion surplus under the baseline and a $153 billion deficit under the president's plan.
All told, the CBO says that the administration's tax policy would lead to additional deficits of $2.7 trillion over the next ten years. But just $326 billion would be seen by 2005 and just $802 billion would be seen before 2008. These deficit figures incorporate spending as well as tax plans--and the spending differences dwarf any changes in tax law. The numbers can be sliced a lot of ways, and there are serious discrepancies between CBO numbers and administration numbers. (The CBO's complete analysis is available on its Web site.)
But they all show how easy it is for government officials to present a big number now, while most of the presumed benefit will be enjoyed much later.
(Excerpt) Read more at forbes.com ...
How can anyone characterize this drop in the Federal bucket as "excessive"?
Ya think?
But the problem is that after several "conservative" votes, they feel they've "earned" enough brownie points to defect on their own private projects. Voino voted AGAINST the tax cut; DeWine AGAINST ANWAR.
The frustration is that in the real world of politics these guys IN FACT do vote conservative just enough of the time to get them elected, but without another 10 GOP senators to take up the slack, the "maverick" votes of some of these people are just enough to halt any real reform.
I know we all view this from our perspective, but if you view it from theirs, they think they are towing the conservative line, and every once in a while get to indulge themselves. It's not right, but it is reality. We need either 5 more Rick Santorums or 10 more DeWines, and, unfortunately, the latter is easier to elect than the former.
The socialists spent 70 years "phasing in". Seems to have paid off for them.
yitbos
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