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Crossing the divide
TownHall.com ^ | Thursday, November 21, 2002 | by Larry Kudlow

Posted on 11/20/2002 9:50 PM PST by JohnHuang2

A tax-cut battle royale is shaping up in the White House, with President Bush's economic team divided over which measures will best strengthen incentives for economic growth and stock-market investment.

Economists Larry Lindsey and Glen Hubbard continue to favor a broad-based tax-cut package that would boost stock-market values and increase after-tax cash flows for businesses and families. Those two made similar arguments a year ago, but they were overruled by Paul O'Neill and Mitch Daniels -- the Bush advisors who favor a much more austere economic strategy based on deficit reduction.

Treasury Secretary O'Neill has never been a friend of supply-side economics. He has illustrated this by way of numerous hip-shooting comments since joining the Bush team. Though he professes to favor a thorough overhaul of the corporate tax code, perhaps even its elimination, his position is much more narrow and smacks of social engineering. At a time when deep cuts are receiving deep attention, O'Neill is appealing for very light, targeted tax relief, such as child tax credits and reductions in the marriage penalty. More, he has never set a detailed economic blueprint down on paper. He's all talking points and no package.