Sen. Phil Gramm, a Republican candidate for president, says the coming congressional decision on tax cuts will be "the most important vote we cast this year." Sen. Chris Dodd, general chairman of the Democratic National Committee, says both President Clinton and various GOP leaders ought to drop their competing tax-cut proposals instead of "trying to one-up each other." Both are right.
Mr. Dodd is right because it defies logic and simple arithmetic to suggest that the federal government can genuinely move toward a balanced budget at the same time it is reducing tax revenues. Mr. Gramm is right because no vote this year will do more to show the American people whether its elected politicians are sincere about putting federal finances in balance or more interested in catering to the tax-cut crowd.
Mr. Gramm is staking his White House bid on proving he is more fervently in favor of the tax-cut proposals approved by the House Budget Committee than his rival for the presidency, Republican Senate leader Bob Dole. Senator Dole talks the talk about tax cuts but has a long affiliation with Sen. Pete Domenici, whose Senate Budget Committee spurns any revenue reductions until sufficient actual cuts in government spending are made.
Given a choice between the Gramm and Domenici approaches, Republicans should choose the latter. The Wall Street Journal has published a comparison of the two that shows how the House Republicans have "backloaded" their seven-year plan so that most of the punishing hits will not occur until 1999, when this year's debates will be old and inoperative history. In this context, Senator Gramm's tax cuts would be sweeteners taking place coincidental with his presidential campaign, while his slashing of government programs with their special constituencies would take place much, much later.
Given a choice between Mr. Clinton's "middle class tax cut" and Mr. Dodd's pox on all tax cuts, Democrats should choose the latter. But Mr. Clinton found it useful to promise such a cut during his 1992 campaign and it would be out of character for him to stop what his one-time foe, Paul Tsongas, described as "pandering."
This whole situation cries out for a revolt of the budget hawks -- of those legislators in both parties who are serious about balancing the budget and know, in their hearts, that tax cuts are counter-productive to that purpose. This is a long-shot hope, but one too important to abandon lightly.