A Pill We Won't Swallow

As President Bush made his bold advance into the chambers of the House of Representatives Tuesday, he knew exactly what to say both to please and to mislead the millions of Americans who were audience to his State of the Union address. Bush, hoping to avoid the presidential shortfalls of his father, digressed from his seemingly constant rhetoric on a potential war in Iraq to briefly discuss the pivotal state of the domestic economy. Unfortunately, his plan to fix the struggling economy is overly simplistic and a thinly veiled ploy at satisfying his rich political base. And while Bush did promise funding for some praiseworthy and innovative programs that Democrats will be happy to support, these programs only served to distract eyes and minds away from his hawkish and conservative political agenda.

Bush made friends and allies by proposing $600 million in funding for drug treatment and $450 million for over a million disadvantaged American students. He proposed $1.2 billion for research into hydrogen-fueled cars, which would presumably be better for the environment and lessen our dependence on oil. And the $12 billion he promised for AIDS research can potentially ease the suffering of millions of people. But the extent of these proposals are miniscule next to Bush’s budget cuts. In effect, they are just sugar-coating a nonsensical and unfair economic platform that will disproportionately benefit the richest Americans and place a fiscal burden on future generations who will be forced to deal with today’s rising debt.

With a budget deficit estimated to set a new record—to the tune of $300 billion—Bush remains stubbornly fixated on pleasing the wealthy. The President’s overly simplistic economic arguments called for a 10-year, $674 billion tax-cut plan that he believes will stimulate the economy. A central focus of his new tax cuts to bolster growth is the elimination of taxes on stock dividends paid to investors. But because stock owners are disproportionally wealthy, under this new proposal, the richest one percent of Americans would be granted more tax relief than the bottom 95 percent of taxpayers combined. Surely, making the first perogative in tax cuts easing the burden of the rich is not the most effective way to aid citizens who are in dire need of economic relief. Ironically, putting money in the hands of the poorest Americans—who would spent it more quickly than the rich—would do more to boost demand and increase job growth, the President’s proclaimed goal.

And Bush’s rhetoric in support of these cuts is either misinformed or disingenuous. In supporting his tax cut, Bush claimed that “92 million Americans will keep this year an average of almost $1,100 more of their own money.” Using the word “average” to describe a mean tax decrease is deceiving. If the richest taxpayers get tremendous tax breaks, this increases the mean value, making the benefits to poor Americans look larger. The median tax decrease would better reflect the benefit to the “average American,” and would surely be significantly lower.

The President is wise to address the critical state of the domestic economy. Even with a war looming abroad, the administration must maintain concern for the financial problems here at home. But unless he can produce an economic strategy that is more ecconomically feasible and better helps the poor, the President’s efforts could quite possibly do the country more harm than good.