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From National Journal’s “Congress Daily PM",
Wednesday, March 12, 2003
“Meanwhile, Majority Leader DeLay today brushed aside arguments that the Bush administration should hold off plans to attack Iraq until it has secured approval from the United Nations, saying the international body has become irrelevant and outlived its useful life. ‘They can talk until they're blue in the face over at the U.N.,’ DeLay told an America's Community Bankers meeting today. ‘I think the days of the United Nations have come to an end ... because they can't do anything.’ DeLay also said it was Congress' duty in a time of war to significantly cut taxes. ‘Nothing is more important in the face of a war than cutting taxes,’ he said.”
From the Congressional Record,
Remarks by Congressman George Miller
Wednesday, March 12, 2003
AMERICA'S SHARED SACRIFICE
(House of Representatives - March 12, 2003, Page H1779)
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. George Miller) is recognized for 5 minutes.
Mr. GEORGE MILLER of California. Mr. Speaker, Congress Daily reports today that in a speech to the bankers, Majority Leader Tom Delay said that ``nothing is more important in the face of a war than cutting taxes.''
Not only does that defy the history of great leaders in the Western world who understood the necessity of harboring our resources in times of uncertainty and times of war, but it also defies what the American community expects at a time of war.
That is the notion of a shared sacrifice. At a time when we are on the eve of sending our young men and women in harm's way, we have to think about what the contribution is of the rest of us. We understand the implications of this war in terms of costs are now said it could exceed $100 billion, but we do not know that, because the war has not been fought yet. We also understand that there is going to have to be a long-term commitment in Iraq after the war, and we do not have any idea of what that cost is going to be.
We know that, in fact, these costs, whatever they are, are not in the budget as submitted by the President of the United States, nor are they in the budget that is being formulated by the committees in the House and the Senate, but what this does suggest is that this tax cut and when we add to them the tax cuts that the President has proposed, ending with the taxation on dividends by providing huge amounts of tax free income for the wealthiest people in this country, what it suggests is when the bill comes due for this war, when the $5 trillion debt comes due because of the spending and because of the war and because of the Bush economy, that one group of Americans will not have to participate in that shared sacrifice. Those individuals, because of these tax cuts, will live in a tax free world.
So when the interest mounts on the debt year after year, when we have seen in a matter of 2 short years going from almost a $5 trillion surplus to a $2 trillion deficit, when we see the deficit re-estimated into the hundreds of millions of dollars within a matter of months, apparently our colleague the gentleman from Texas (Mr. DeLay) and the President believe that somehow the wealthiest Americans in this country should not share in that sacrifice; they should not be burdened with the responsibility of helping to pay that back.
That will be left to people who earn their income through wages. They will continue to be taxed. They will continue to pay high rates of Social Security taxes, but the wealthy will not. They will escape that.
No, that is not the most important thing in the face of war. It cannot be cutting taxes. It cannot be how this country works its way through that war. It is more importantly how we make the decision to go to war. The President has offered a number of rationales for going to war. Most of them have been stripped away in the debate that is taking place in the international community, in the debate that is taking place in this country.
We have seen evidence offered and the evidence falls apart time and again. We have seen connections trying to be made between the war on terrorism and Iraq. The evidence has not been sustained, and yet as we proceed into that war the one thing that is on the gentleman from Texas' (Mr. DeLay) mind is cutting taxes. I think it defies what we know this country has done in the past when we have engaged in these conflicts and the necessity of what must be done, and I would hope that once again we would understand that the burden must be shared across American society because there are those who will be called upon to make the supreme sacrifice and that will be their lives and their futures in pursuit of this war should the President decide to go forward.
Clearly those who are at home must continue to engage in the kind of effort to pull this Nation through this period of time, and so we cannot embrace the philosophy of the gentleman from Texas (Mr. DeLay) that somehow the most important thing that we can do is to cut taxes and our most important obligation is somehow to tell the wealthiest people in America that they will not share in that sacrifice, they will not be there when the bill comes due for future generations.
From the Los Angeles Times
Monday, January 13, 2003
By Ronald Brownstein / WASHINGTON OUTLOOK;
Bush Breaks With 140 Years of History in
Plan for Wartime Tax Cut
Old question: What did you do in the war, Daddy?
New answer: I pocketed a large tax cut, honey.
Pause.
And then I passed the bill for the war onto you.
That, essentially, is the generational transaction established by the sweeping tax cut President Bush proposed last week. The proposal commits Bush to a goal unprecedented in U.S. history: cutting taxes in wartime.
Forget guns and butter: Bush is now offering bombs and caviar.
That's an odd combination, as Bush demonstrated last week when he announced his plan. First he emphasized the threat that international terrorism poses to U.S. security and somberly declared that this is a "time of war."
Then he proposed a good-time economic plan that would shower Americans with $674 billion in tax breaks over the next decade -- at a time when the federal budget has fallen back into deficit and faces irresistible demands for more spending on defense and homeland security. The unavoidable result will be bigger federal deficits and a larger national debt, which amounts to shifting the cost of defending the nation onto our children.
With this push to slash taxes during wartime, Bush broke from 140 years of history under presidents of both parties. In every major conflict the United States has fought since the Civil War (and some minor ones), Washington has raised taxes to pay for the war.
Americans are never particularly happy about tax increases. But we have always accepted heavier burdens as the price those at home pay to support those under fire on the front. One World War I-era economist wrote: "Patriotism can often be translated into dollars and cents -- in fact, the material side of patriotism is often quite as important as the spiritual side."
The income tax and the inheritance tax (which Bush is trying to eliminate) were signed into law by Abraham Lincoln, the first Republican president, to help pay for the Civil War. As journalist Steven R. Weisman recounts in his engaging recent book, "The Great Tax Wars," by the time the war ended, Congress had imposed a top income tax rate of 10% on all incomes over $5,000. The inheritance tax, he writes, "passed Congress with little debate because of the widespread demand in the North for sacrifice, especially from the wealthy."
After the war, both taxes were eventually allowed to lapse. But to pay for the Spanish-American War, President McKinley -- also a Republican -- signed into law an excise tax on petroleum and sugar companies and reinstated the inheritance tax.
To fund the country's entry into World War I, President Wilson -- a Democrat -- massively increased the number of Americans subject to the income tax and raised the top rate from 7% to 77%.
Congress cut taxes during the 1920s. But when the nation fought World War II, Americans reached into their pockets again. Once more, the number of Americans subject to the income tax soared (from 4 million to nearly 43 million) and the top rate rose to 91%.
Taxes increased again to fund the Korean War; even in the Vietnam War, President Johnson belatedly imposed a war surtax on incomes.
The war against terrorism or a possible return match against Iraq won't demand nearly as many resources as World Wars I or II, or even Vietnam and Korea. But these tests will still impose significant burdens on the government.
By 2005, Bush wants to spend at least $100 billion a year more on defense than President Clinton proposed in his final budget; a war in Iraq would add to that bill. Bush has also proposed to spend $38 billion on homeland security this year. And even those commitments, the administration concluded in a homeland security plan last summer, "must be viewed as down payments to cover the most immediate security vulnerabilities."
As Weisman writes, when Wilson urged higher taxes in World War I, he stressed the nation's obligation to avoid burdening future generations with the war's cost through excessive borrowing: "The industry of this generation should pay the bills of this generation," he said. Bush seems to be ignoring that lesson.
By proposing large new tax cuts when Washington is already in deficit and facing growing costs for defense, Bush is threatening an explosive growth in the national debt. When Bush took office, the nonpartisan Congressional Budget Office said Washington would eliminate the publicly held national debt by 2008 -- as long as the government fulfilled the pledge Bush and Al Gore each made in the 2000 presidential campaign to apply the surplus temporarily accumulating in Social Security toward paying down that debt.
But Bush abandoned that promise under the pressure of recession, the war on terrorism and the cost of his $1.35-trillion, 10-year tax cut of 2001. Even before Bush's new proposals, the CBO had estimated that Washington would need to divert more than $2 trillion from the Social Security surplus to operate the rest of government through 2012. With that money no longer available for debt reduction, CBO projected the debt would rise to $3.8 trillion by 2008.
The further tax cuts Bush proposed last week will only deepen that hole. Because the operating side of the federal budget is already deeply in deficit, every penny of Bush's new tax cut would have to come from taxes raised for Social Security or by increasing the national debt. The Democratic staff on the Senate Budget Committee has estimated that if the new Bush tax cut plan passes, as well as the prescription drug plan for senior citizens he has endorsed, the national debt will balloon to $4.8 trillion in 2008.
More debt means higher interest costs for the government, which means higher taxes on future generations. It all amounts to Americans voting themselves a tax cut and letting their children pay for defending the country through a larger national debt. Surely Woodrow Wilson better captured the nation's spirit when he said, as the bullets flew in World War I, that Americans "know ... the war must be paid for and that it is they who must pay for it, and if the burden is justly distributed ... they will carry it cheerfully and with a sort of solemn pride."
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