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Jewish World Review Dec. 5 2001 / 20 Kislev, 5762

Dick Morris

Dick Morris
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Both parties are phony on stimulus debate


http://www.NewsAndOpinion.com -- NOBODY, on either side of the partisan aisle in Washington, is telling the truth about their position on the budget/spending/tax cut/stimulus package debate now in full swing. So, here's the code book to understand their real positions and motives:

Democrats -- They don't want any stimulus package to pass because they don't really want the recession to end. The party in power will get blamed if the downturn continues and Democrats are licking their chops in anticipation of controlling Congress after the 2002 election.

But.they have to seem to want the recession to end, so they they are proposing a stimulus package in the hopes that the Republicans reject it so nothing passes and joblessness continues to rise.

Their second goal is to up the ante on Bush by insisting on twice as much spending as he proposes to fight terrorism and compensate New York. They have no real idea how much is needed, but just in case things screw up they want to be able to say "we told you so" but you wouldn't let us spend the money we needed.

If the Republicans pass the Democrats' spending program, the donkeys will have to settle for their third goal: increasing the size of the resulting budget deficit so they can campaign against the irresponsibility of the Bush tax cuts.

Republicans -- They want to use the recession as an excuse to continue their tax cut agenda and achieve their cherished goal of cutting capital gains taxes even further. They oppose the Democrats' plans to raise spending on anti-terrorist initiatives not because they are really worried about the resulting deficit but because they are concerned that the Bush tax cut will become a political liability if the deficit gets too big.

The elephants are hoping that the Democrats will slit their own throats by criticizing Bush while he's popular and by seeming to inject partisanship into the political no-fly-zone atmosphere of today's Washington.

All this concern about the size of the deficit is baloney as well, for both parties. The chances are that the deficit will not grow so large as to go beyond what can be funded by Social Security tax revenues. During the 90s, we referred to a budget that used up all FICA revenues to pay for federal spending as "balanced" and we all labored in the vineyards to achieve it.

The Social Security tax revenues that would be tapped to deal with the "deficit" would otherwise just sit around collecting interest until they were needed decades hence. How much better to use them to stimulate the economy and create the kind of growth that, alone, will be able to salvage Social Security in the long run?

The Republicans, while just as phony as the Democrats on these issues, are more short-sighted, as usual. It is in their overwhelming political interest to get out of the recession as fast as possible. All the discussion over whether it is Bush's or Clinton's recession matters little. Bush and the Republicans will be blamed if it continues on to the end of next year. They will likely pay for each point of higher unemployment with twenty House and three Senate seats in 2002.

So gridlock helps the Democrats. The GOP should simply say "yes" to the Democrats and pass the stimulus package Daschle and Gephardt support. It's not as good as the Republican version, but it will help do the job. And the Republican need for economic stimulus should outweigh any ideological concerns about the size of government spending.

A large deficit in 2002 will not cost Bush control of Congress but a recession will. He has until Christmas to get a stimulus package passed in time to do any good before November of 2002. Remember that the economy emerged from recession, according to the economists, more than a year before his father lost the presidency over the economy.

President Bush should ask his father (or his predecessor) how nice is to rule with a Democratic Congress on his hands if he has any doubts.



JWR contributor Dick Morris is the author of, among others, The New Prince. Comment by clicking here.

Up

11/29/01: When terrorists can enter legally, it's time to change the laws
11/21/01: Go for the jugular!
11/16/01: You are all incumbents
11/14/01: Clinton's failure to mobilize America to confront foreign terror after the 1993 attack led directly to 9-11 disaster
11/12/01: To the generals: Don't worry about losing support
11/08/01: The death of the white liberal
11/07/01: Our leaders are being transformed in a way unprecedented in post-World War II history

© 2001, Dick Morris