The Tax Flip-Flop: Why Bush Did It
SENDING forces to the Persian Gulf and shifting his position on taxes were, arguably, the biggest decisions President Bush made since taking office. The first he made relatively easily. The second he agonized over. Mr. Bush was, and is, convinced that raising taxes is the wrong remedy for the ailing economy. Further, he believes that the needed deficit reductions could be achieved by cutting government spending.Skip to next paragraph
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But finally he became persuaded - after months of wrangling with the Democrats in Congress - that the only way a budget package could be produced would be if he ate his ``read-my-lips'' words and opened the door to taxes.
When he did it, he put the best face on it he could. He said that ``new circumstances'' caused his reassessment. But in conversations with his advisers he fumed. He knew he would take a big hit politically for this radical change in course. More than that, his anti-tax position was a matter of principle with the president. Despite earlier doubts, he had become a true believer in this economic doctrine while serving under Ronald Reagan.
Bush held his no-tax ground for many months before relenting. While the Democrats in Congress carefully avoided getting out in front on raising taxes, it became abundantly clear they would agree to no budget package that didn't include reliance on this approach.
So as the day of reckoning neared - with the automatic, massive cuts mandated by the Gramm-Rudman deficit-reduction act on the horizon - the president had to decide whether sticking to his guns and scorning a deal with the Democrats would be better than going the taxation route. He seriously considered doing this. But in the end he concluded that the turmoil that would ensue would be intolerable. Further, he simply could not accept some of the big cuts to programs he, himself, favored - particularly defense.
There was something else: With the country either on the edge of or already entering a recession, the government's procrastination in dealing responsibly with its budget was eroding public confidence and hurting the economy.
So Bush bowed to the Democrats, who control both houses of Congress, and gave up his cherished anti-tax position, taking a step that incorporated a taxation approach he basically opposed but which might help avert a deep recession.
The political implications for the Bush administration are these. In the short run, obviously, the president has been damaged. Republican candidates are disassociating themselves from Bush because of his tax shift.
Crowds of voters along the campaign trail are finding his new theme a little difficult to accept: That they should elect more Republicans to Congress so that he could be more effective - next time - in holding the line on taxes. Many Americans think that he had the power to prevent these new taxes, and that he failed them.
House Speaker Tom Foley at a press luncheon the other day lauded the president for his ``cooperation'' with the Democrats in shaping the new budget package. He said Bush ``voluntarily'' agreed to accept taxes and that he was in no position now to blame the Democrats for them.
He added that the president wanted credit for putting the budget package together and, at the same time, credit for resisting taxes in that package. He said it was ``like having it both ways'' and that Bush couldn't have it both ways.
A couple of days later, at another meeting with reporters, the Senate majority leader, George Mitchell, echoed Foley's critique. Mitchell, too, faulted the president for vacillation and tied Bush's current political troubles to the blurred and changeable image he projected during the budget negotiations.
In the long run, however, Bush may be the beneficiary of all this. If, indeed, this budget package helps avert a substantial recession, it might well mean that the economy would be good enough in 1992 to encourage the electorate to keep George Bush in office. Indeed, his advisers were telling the president this as he was weighing the pros and cons of becoming a taxing president.