Tax cut trickery

Washington Post: DANGER: GIMMICKS AHEAD. That's the warning sign that ought to be flashing as House and Senate lawmakers craft the details of the tax cut whose bottom-line number -- $350 billion? $550 billion? -- has been the subject of such angst. The tax-writers are trying to cram as many goodies as they can into as small a package as possible in order to get the whole thing through the Senate, where key Republicans have said they will not support any cut whose net cost is greater than $350 billion through 2013.
And so the backers of the "supersize it" school of tax cuts are dredging up the same accounting tricks they used to great effect in 2001 -- along with a few new models. Senate Finance Committee Chairman Charles Grassley, R-Iowa, who gave his word to oppose any cut larger than $350 billion, and the two maverick Republicans who have insisted on sticking to that number, Maine's Olympia Snowe and Ohio's George Voinovich, so far have resolutely insisted on an honest bill. They're under a lot of pressure, which will increase when the Senate moves to what promises to be an ugly conference with the House, where the majority favors a $550 billion tax cut.
To understand the trickery ahead, it helps to recall how the tax cut was manipulated two years ago. The Senate backloaded the bill -- delaying the dates that certain measures would take effect until after the 10-year estimating period, thereby making the bill appear less costly than it was. Then in conference lawmakers agreed to pretend that major breaks would expire after nine years -- gaining an extra, supposedly cost-free 10th year. Within weeks, with the pretense having served its cynical purpose, Republicans were clamoring to "sunset the sunset" -- in other words, to make the cuts permanent.
Dishonest 'offsets'
Now the menu of possible manipulations includes dishonest "offsets" from savings that will never materialize, slow phase-ins of costly measures and artificial, unrealistic expiration dates. The White House is peddling a list of $300 billion-plus in government savings that can supposedly be recovered by clamping down on waste, fraud and abuse. How often have we heard that one? Another feint is having the dividend tax cut that is the crown jewel of President Bush's tax package phased in over three years -- and then pretending that it would expire after five years. It's hard to imagine even the most skillful politician voting for such a charade with a straight face. Yet another possibility is passing two tax bills.
Under this scenario, the dividend tax cuts would be stuffed into the $350 billion tax cut, which can pass the Senate by simple majority vote under the budget resolution passed last month. Then senators would be dared to turn down politically popular items such as tax relief for married couples or child tax credits, which would require 60 votes.
Even a $350 billion tax cut, which Bush derides as "little bitty," is dangerously irresponsible at a time of growing deficits and demands on government. Instead of gaming the system to get more, Congress ought to show the backbone to live within the nation's means.