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 February 28, 2001
Salisbury Post; Rowan County, NC

Editorial

Proceed with caution — states offer tax-cut lesson

SALISBURY POST

           


If you polled the general population and asked who would like to take home more money on pay day, shouts would ring out. Everyone likes that idea.

Especially President George W. Bush, who ran for office promising a hefty tax cut.

But seeing how North Carolina and other states are struggling to balance their budgets this year, responsible citizens have to advocate caution on the Bush tax-cut plan.

As Mike Easley and several other states’ governors can attest, revenues do not always live up to expectations. And, unlike business, government faces increased demands during economic slowdowns:more families needing assistance, more stress on health care, more need to innovate and find ways to get people back to work.

So while Bush’s something-for-everyone budget address to Congress shone with optimism Tuesday night, it also sounded too good to be true. He pledged to significantly increase spending for education, defense, Social Security and Medicare —including a prescription drug benefit for low-income seniors. At the same time, he would pay down the $3.2 trillion national debt by $2 trillion, create a $1 trillion contingency fund and reduce taxes by $1.6 trillion, all over the next 10 years.

If Washington has enough money to do all that it clearly does have too much money — obscenely too much. But 10-year projections of this sort are about as reliable as a house made of straw. The first big wind could blow it to pieces.

Speaking of fairy tales, Bush also tried this line: “Some say my tax plan is to big. Others say it is too small. I respectfully disagree. The plan is just right.”That was a nice, Goldilocks touch, but it provided little substance on which to build confidence in Bush’s numbers.

Bush points to the economic slowdown as a reason for the tax cut. If tax cuts were such a great stimulus, North Carolina would not be in financial trouble now. But tax cuts do not happen in a vacuum; they happen alongside increased education spending, natural disasters, burgeoning medical expenses and unfavorable court decisions. The president would do well to study what’s happening in the states.

Bush fell back on the popular line that Americans can spend their money just fine themselves; they don’t need government to do it for them. That’s a sound approach when it comes to spending on yourself, but most people don’t go out and build interstate highways, award Pell grants, pay hospital bills for ailing senior citizens or order supplies for the Armed Services. The federal government performs important functions with citizens’ tax dollars that must continue, in good times and bad.

So here’s a message to the nation’s new chief executive: Thanks for the proposed tax cut. We’ll take it, though few expect it to be as generous as you’re describing and no one wants to hurt vital government services. Avoid over committing yourself or us when it comes to promises about the future. Don’t do to your successor what Ronald Reagan did to your father. Read our lips: Proceed with caution.

   

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