SACRIFICED TO A TAX PLAN

Los Angeles Times: Although the U.S. economy runs largely by itself, it is greatly influenced by government actions. When the economy is in a funk, as it is today, those actions traditionally include national leaders' reassurances that things are not spinning out of control and that remedies are on the way. So far, the Bush administration has failed miserably in building public confidence. Rather than showing urgency and fostering a consensus in Washington for a quick stimulus package, President Bush is crisscrossing the hinterland campaigning for a tax cut that is too large and will be too slow in coming to do the sagging economy much immediate good.
Bush is not even pretending he feels the pain of the investors who have lost trillions of dollars in the stock market meltdown. True, he has toned down his doom-and-gloom rhetoric in response to public criticism, but he makes it abundantly clear on the stump that the accumulating evidence of a struggling economy is a mere backdrop for his tax-cut campaign. And when he says he worries about lights going out in California, he is angling to open protected lands to drilling for oil and gas.
Rebate: Meanwhile in Congress, House Republicans -- aided by a score of Democrats -- hurriedly pushed through a series of tax-cut measures last month that if enacted will put in place much of Bush's $1.6 trillion package. At the same time, the House GOP last week rejected a proposal by a group of Senate Democrats to pump $60 billion -- about two-thirds of this year's anticipated surplus -- into the economy quickly by giving taxpayers a onetime rebate.
Bush said he would accept the rebate -- but only if it were part of his overall proposal. As he said last Thursday, and many times before, "We've got to have long-term relief as well." But it is the long-term effect of Bush's tax-cut package that worries budget analysts most.
A recent Brookings Institution study showed that the Bush tax plan -- conceived a year ago largely from political, not economic, concerns -- would dissipate the entire surplus over the next 10 years, leave no room for new programs and force the government to dip into both Medicare and Social Security surpluses. Not only would it not do much good now, Bush's economic plan could do a lot of harm by upending the government's long-term fiscal balance.
Right now, what Americans need, and aren't getting, is a dose of confidence stemming from political leaders being in control.
DEMOCRATS IN SEARCH OF AN IDEA
Chicago Tribune: Booted out of the White House, the minority in the House for six years running, clinging to a half-share of the Senate, it has come to this for Democrats:
They want to be Republicans.
The Democrats apparently no longer will criticize President Bush for pushing big tax cuts. They've decided to one-up the president by pushing tax cuts further-faster-quicker than he is.
The Democrats new solution: Give taxpayers $60 billion right away with a one-time tax rebate. There's your jump-start for the economy.
"Is it possible that the Republicans have just met the first tax cut they don't like?" Senate Minority Leader Tom Daschle snickered last week, when the plan was set out.
Quick stimulus: Come on, this isn't even a fresh idea. Momentum has been building on the Republican side of the aisle for some kind of quick stimulus -- something around, say, $60 billion.
A quickie tax cut is not going to make a blip in the $10 trillion U.S. economy. Treasury Secretary Paul O'Neill knows that. Rep. Bill Thomas, Republican chairman of the tax-writing House Ways and Means Committee, knows that. Chances are, even Tom Daschle knows that.
And yet, leaders in both parties can't part with the notion that they're going to ride to the rescue of a struggling U.S. economic engine with rebate checks all around.
The Bush plan seeks to phase in its $1.6 billion tax cut over 10 years. The largest drain on federal revenues would not be felt until several years down the line. Whether or not you buy all the particulars, this is tax policy with an eye toward long-term economic impact.
Unfortunately, as the economic news quickly turned sour, the president couldn't resist selling his plan as a booster shot. The argument rang hollow, but has been picked up by both parties.
Some Republicans want to cut marginal income tax rates retroactive to the beginning of the year. Democrats want to divvy up $60 billion among everyone who pays income taxes -- and those whose primary federal tax burden consists of Social Security and Medicare taxes. With the Democratic plan, every individual who pays income or payroll taxes would get a flat $300 -- couples would get $600.
And so the Democrats, who ever-so-briefly laid claim to being the real debt-reduction hawks in Washington, have forfeited the title.
Understandable, perhaps. When they lost the White House, they lost control of the agenda. Democratic leaders in Congress have been having a hard time adjusting to that.