Daschle floats option to Bush plan
Posted on 01/25/2003 7:59:04 AM PST by MeekOneGOP
Daschle floats option to Bush plan
He calls for income tax cuts of $300 a person, aid to states, jobless
01/25/2003
CLEVELAND - Senate Democratic leader Tom Daschle called Friday for $300-a-person income tax cuts and billions in aid to cash-strapped states as part of an alternative to President Bush's economic-stimulus recommendations.
Mr. Daschle's proposals also include tax breaks to help small businesses afford health insurance premiums and aid for an estimated 1 million jobless people who have exhausted their unemployment benefits.
Mr. Daschle, D-S.D., announced his proposals in a speech before the City Club of Cleveland. While the proposals stand virtually no chance of enactment in the Republican-controlled Senate, they give Democrats an alternative to support during the coming debate over the president's recommendations.
"We need an economic plan with a single overriding goal of helping the economy, and helping the economy now," Mr. Daschle said. "The president's plan is not economic stimulus. More than 90 percent of the tax cuts wouldn't get to the taxpayers until after 2003."
The measures proposed by Mr. Daschle would expire after one year and carry a price tag of roughly $140 billion. Mr. Bush has proposed a $674 billion, 10-year plan.
Mr. Bush proposed the elimination of the tax on dividends and called for acceleration of some of the income tax cuts that Congress approved two years ago - two elements that Mr. Daschle and other Democrats have criticized. The items were not part of Mr. Daschle's plan.
"If we're looking at a short-term economic goal, if we want to get the biggest bang for the buck in the shortest period of time, the dividend tax cut is not it," Mr. Daschle said.
Mr. Daschle proposed a tax cut of $300 per adult and an additional $300 per child, up to two children per family. Adults would qualify even if they have no federal tax liability, as long as they pay Social Security and Medicare payroll taxes.
He also proposed additional tax breaks for businesses, including more generous depreciation designed to encourage companies to invest in new equipment. He also called for a tax credit to help small businesses pay for health insurance premiums and proposed a credit for businesses investing in broadband high-speed Internet equipment.
The aid to states and local governments includes about $15 billion with no strings attached, as well as about $25 billion more to be divided among Medicaid, education, homeland security and highway and mass transit construction.
Mr. Daschle's speech was part of a broader Democratic attempt to counter the administration's economic proposals. The party's leader in the House, Rep. Nancy Pelosi of California, proposed an alternative earlier this month, and she and Mr. Daschle plan a joint appearance Monday that their offices described as a "pre-buttal to President Bush's State of the Union Address."
White House press secretary Ari Fleischer dismissed Mr. Daschle's plan as one of many alternative stimulus proposals from Democrats. He declined to comment on the specific proposals made by Mr. Daschle, saying Mr. Bush intended to fight for his tax cut package.
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Why should a dime of my money go to bail out states that elect politicians that promise them the moon. They elected the idiots that made the mess, live with it
All of us can pontificate about cutting spending, that's the easy part. What to cut is the hard part. I agree that some cuts must occur and some tax increases must occur. But what has happended in Washington over the last 20 years is a shift of responsibility and cost from the Feds to the state.
It's easy to mandate that the states are now tasked with specific programs, and many should be at the state level. The problem occurs when no assistance in funding happens. The Feds should pay for some portion of a program that is shifted. Take Medicaid dollars. Medicaid is not only for the poor of a state but those who are mentally and physically disabled. If you cut Medicaid dollars, sure, some of the poor who sit on their lazy asses and collect welfare are impacted, but so are those mentally handicapped. Do you want to cut their dollars too when they have no other means of support?
This is not an easy issue. The Feds provide a percentage of dollars to each state to assist with Medicaid. Mississippi is the highest match of Medicaid dollars, with a match of 75 cents of Federal dollars for each 25 cents paid by the state. So for every $1 cut of Medicaid by Mississippi, they also lose $3 of a Federal match. So what happens? More Medicaid recipients lose funding which creates other problems such as higher crime, homelessness, etc.
States should cut spending and probably raise taxes before asking the Feds for any assistance, agreed. But one must consider the impact of deep cuts that actually hurt the vunerable. Difficult issues are not solved with rhetoric, but with careful understanding of the impact of one's decisions.
Because if we don't bail them out in the short term (and that's only what I'm speaking about), then the economy will stagnate because of negative growth and debt default. Again, it's easy to say "live with the mess" but these are difficult problems that impact millions of people across our nation.
I suggest that the Feds, before any loans to states, establish spending agreements not only to repay Washington, but also to force states to get their fiscal house in order. Sadly, this makes too much sense for politicians to implement.
Well then, that explains why Daschle favors a rebate.
Last thing he wants to see is the economy improve.
You're right, but Daschle is proposing a-no strings attached- loan to the states
Works a lot like school vouchers.
CUT SPENDING
No, I'm a CPA and head of accounting for an international not-for-profit agency. Again, I agree that states must cut spending, but if Oregon is a state that mandates a balanced budget, it's almost impossible for a state to cut spending enough to balance a budget, if the deficit is too large. Unfortunately, a tax increase may be necessary.
The scare tactics of "if we don't raise taxes, then we can't pay for anything" do nothing to further the debate and harm it. Unions (aka liberals) are typically notorious scaring old people and the most vunerable among us.
As long as government is in charge, there will be the same problems.
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