There's a lot of concern that if we were to enact all of the tax cuts in the "Contract with America" that it would make it all but impossible to bring the deficit under control.
Who said that?
None other than House Rules Committee chairman Gerald B. H. Solomon, a solid conservative Republican from gentry country up the Hudson River. He also happens to be a no-nonsense deficit hawk who has "a lot of concern" about a Newt Gingrich tax-cut package that would cost the Treasury an estimated $190 billion over five years and -- get this! -- $700 billion over ten years.
Deficit hawks, be they Democrats or Republicans, represent the nation's best hope for stopping the irresponsible Gingrich tax-cut program and a pint-sized Bill Clinton version of same. Such is the disciplinary power of Speaker Gingrich that proposals to offset his proposed $190 billion tax cut with a $190 billion slash in discretionary spending are being frog-marched through the House. This trade-off, however, rightly angers lawmakers who want spending cuts used to reduce chronic deficits.
There are two things wrong with the Gingrich approach: First, his spending cuts are mainly at the expense of poor kids and vulnerable adults while the tax cuts tilt heavily to benefit the wealthy. Second, the loss of Treasury revenues will make it only that much harder (Mr. Solomon calls it "impossible") to balance the budget by 2002.
Although deficit hawks in the House will not prevail, we are counting on them to make a legislative record that will embolden deficit crunchers in the Senate. Thus, we are encouraged by conservative House Democrats who charge the GOP is reneging on promises to put the first priority on deficit reduction. No doubt some Republicans agree.
One of Mr. Solomon's counterparts in the Senate is Judd Gregg, R-N.H., who has dared to say Mr. Clinton's $63 billion tax cut is preferable to the larger GOP proposal and would like to scrap both. Senator Gregg's Republican task force on entitlements has just issued a report calling for a $495 billion rollback in Social Security, Medicare, Medicaid, federal pensions, farm subsidies, etc. as a means of balancing the budget by 2002. Significantly, the Gregg package makes no allowances for revenue loss due to tax cuts. This is the strongest evidence yet against Gingrich-Clinton tax cuts.
Both the speaker and the president need to be told that deficit hawks in both parties will not go along with their fiscal fecklessness. This generation must stop living on borrowed money. The mountainous debts piled up in recent years have eroded the value of the dollar, undercut U.S. competitiveness, generated chronic trade and current account deficits and imperiled the nation's future.
The agenda for Congress should be clear: Put aside all tax cuts. Cut spending, including sacred-cow middle class entitlements. Move resolutely toward balancing budgets on an average-year basis.