As the new 110th Congress gets down to business, a very lame duck president attempts to co-opt some initiative. The Democrats have all the momentum in their favor. Focusing on long neglected domestic issues to establish a new work ethic and remodeling of Congress will build on that.
The president is doomed to the Iraq albatross around his neck, deservedly. Congressional Republicans will vote with Democrats on many issues. If Bush joins them, as he has signaled he would on the federal minimum wage, it could save some of his failed presidency and send a good message to voters that checks and balances also restores some sanity. If Bush and hardcore neoCons refuse to adjust to reality, and block issues that voters care about still playing politics instead of focusing on policy, they will pay for it again at the ballot box in 2008. The OpEd that Pres. Bush signed in the WSJ this week, (linked below), attempted to reclaim the spotlight from the historic changeover in Congress. Unfortunately, he chose an issue on which his bully pulpit has lost authority. Such is the path of those who bluff and intimidate but who cannot adjust and correct when theory does not fit reality. - kwc NYT Editorial Jan. 06, 2007 A Heckuva Claim: President Bush wrote in a Wall Street Journal op-ed Wednesday that "it is also a fact that our tax cuts have fueled robust economic growth and record revenues." The claim about fueling record revenue is flat wrong, and it is shocking that the president should persist in making such errors. After all, tax cuts are the central plank of his domestic policy. How can he fail to understand the basic facts about them? This is not just our opinion. Harvard's N. Gregory Mankiw, an economic conservative who served as chairman of Mr. Bush's Council of Economic Advisers, has tested the hypothesis on which Mr. Bush's claim is based: He looked at the extent to which tax cuts stimulate extra growth and the extent to which that growth generates extra tax revenue that offsets the initial loss of revenue from the tax cut. Mr. Mankiw's conclusion: Even over the long term, once you've allowed all of the extra growth to feed through into extra revenue, cuts in capital taxes juice the economy enough to recoup half of the lost revenue, and cuts in income taxes deliver a boost that recoups 17% of the lost revenue. So a $100 billion cut in taxes on capital widens the budget deficit by $50 billion, and a $100 billion cut in income taxes widens the budget deficit by $83 billion. If Mr. Bush does not believe Mr. Mankiw, perhaps he may believe the Congressional Budget Office. In a period when it was run by Douglas Holtz-Eakin, another economic conservative who worked in Mr. Bush's White House, the CBO estimated the extent to which a 10% reduction in personal taxes might pay for itself. On the most optimistic assumptions it could muster, the CBO found that tax cuts would stimulate enough economic growth to replace 22% of lost revenue in the first 5 years and 32% in the second five. On pessimistic assumptions, the growth effects of tax cuts did nothing to offset revenue loss. If Mr. Bush believes neither Mr. Mankiw nor the Congressional Budget Office, he should at least respect his own Treasury. Prodded by the White House, Treasury economists have calculated how much extra growth would result from making the Bush tax cuts permanent. They have concluded that economic output would rise by about 0.5% in the first 6 years and by an additional 0.2% in the "long term." Since the federal government collects around 18% of gross domestic product in taxes, enlarging GDP by 0.7% would result in extra tax revenue equivalent to 0.13% of GDP. That would offset less than a tenth of the revenue that would be lost because of the tax cuts. Mr. Bush's op-ed included nice statements about bipartisan cooperation. But the Democrats would be more likely to cooperate with the president if he stopped making things up. http://www.washingtonpost.com/wp-dyn/content/article/2007/01/05/AR2007010501 801.html <http://www.washingtonpost.com/wp-dyn/content/article/2007/01/05/AR200701050 1801.html> Related OpEd by G.W. Bush What the Congress Can Do For America: Let them say of these next two years: we used our time well. http://www.opinionjournal.com/editorial/feature.html <http://www.opinionjournal.com/editorial/feature.html>
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