The populist argument against Bush's budget

The Bush budget presents a serious risk to the Republican Party: It could confirm in the minds of many voters the suspicion that the party serves primarily the rich and privileged.

President Bush's budget is just too easy a target for liberals and Democrats. Though the political fight over the budget in Washington has been relatively civil so far, it could get rough.

If a leading Democrat decides to take the populist route, he or she will have plenty of ammunition. Here's some:

* The estate tax repeal in the Bush tax plan would give 4,500 large estates as big a tax break in 2010 as it does to all of 140 million Americans. A "Head Start program for the rich," says liberal economist Mark Weisbrot.

* During this decade, the $774 billion in tax cuts for the best-off 1 percent of families would pay for Medicare prescription coverage for 39 million senior citizens.

"President Bush says we can't afford anything but a miserly prescription-drug plan because he wants to use all available resources for tax breaks for the rich," charges Bob McIntyre, the liberal director of Citizens for Tax Justice in Washington.

* The same wealthiest 1 percent will get 44 percent of the total tax cut, and about 31 percent of the reduction in income taxes from the rate cut now being considered in the House. These prosperous few pay 37 percent of all federal taxes, 27 percent of the income tax.

Taxpayers in the lowest 60 percent of the income scale get 12.7 percent of the cuts, or on average $256 a year. The average break for the wealthiest 1 percent: $54,480.

* If all federal taxes are considered, the top 1 percent will get a bigger percentage cut by far - five percentage points - than any other income group. When only the income tax is counted, some with low incomes do better in percentage terms.

* Some 12 million families with 24 million children - 1 out of every 3 children - would receive no tax break.

The list could go on.

By now, polls show many Americans realize that the tax cut does most for the rich. The Bush defense has been that those who pay the most taxes should get a big break.

But Democrats are asking in ever-louder tones: This big?

Another defense has been that it is the wealthy who create businesses and jobs that make for prosperity for all. It is the old "trickle-down theory." But in the 1990s, incomes of the well-to-do rose rapidly, and little trickled down to lower-income groups. The top 1 percent got 40 percent of the after-tax income growth from 1989 to 1998, the bottom 90 percent got 5 percent.

Most any economist will admit that too high taxes will kill the goose that lays the golden eggs. But they debate inconclusively what rate is too high.

After marginal tax rates for those with high incomes were raised decidedly in 1993, the nation entered years of great prosperity. Did the higher tax rates create prosperity by turning the budget deficit into a surplus? Or are tax levels not so relevant?

Apparently concerned about its tax-cutting image, the White House has been busy turning out numbers showing the rich getting a smaller percentage of its proposed tax breaks. But experts are reading the fine print, noting what is excluded.

Though it is less clear, there's also a risk on the spending side of this budget that this Republican budget will be seen as helping the well-to-do more than the poor.

For instance, the National Low Income Housing Coalition complains that "solving acute housing problems of the poorest Americans is not a Bush administration priority, despite the call for compassion for the poor."

The budget purposely does not spell out where a host of spending cuts will come. Robert Greenstein, director of the Center on Budget and Policy Priorities in Washington, figures Bush wants to get the tax cut through Congress before informing the public on details of where spending will be chopped.

All budgets involve a certain amount of spin, to be polite, or deception, to be blunt. The Bush budget ranks among the worst in this regard. Mr. Greenstein, who has studied budgets for 30 years, gives this budget a "9 or 10" on a scale of 1 to 10, where 10 indicates extreme spin. That's primarily because it's the "most incomplete" in those decades.

(c) Copyright 2001. The Christian Science Monitor

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