Brad DeLong's Semi-Daily Journal (2004)

The Clown Show That Is Bush Administration Fiscal Policy Continues

Bush administration fiscal policy priorities: widen the deficit, give another tax break to the $300,000+ a year crowd:

WSJ.com - Bush's Goal for Permanent Cuts Takes Top Priority in Tax Plan: President Bush is putting his capital this election year behind a plan to make his tax cuts permanent, shunting aside an earlier proposal to slash taxes on savings. Many of the tax cuts enacted on Mr. Bush's watch will begin to expire during the next presidential term, regardless of which party controls the Oval Office. By fighting now to extend the life of the tax cuts, Mr. Bush can draw a sharp election-year distinction for voters, given the consensus among top Democrats seeking their party's presidential nomination that at least some portion of the Bush tax preferences should be repealed.

Treasury Secretary John Snow has frequently plugged savings enhancements as a vital ingredient in the administration's cure for the economy. "What you want to do is to provide the best incentive for savings," Mr. Snow said at one point in December. But like his predecessor Paul O'Neill, who championed the idea, Mr. Snow wasn't able to win enough White House converts to the Treasury view. Last year, the package was shelved amid White House concerns that it was too costly and that it conflicted with the president's larger goal of cutting taxes on stock dividends. This year, the plan has run into a buzz saw of competing priorities. Among Bush aides, there is deepening concern about rising deficits. There also has been a notable lack of consensus within Republican ranks about details of the savings plan, setting off furious opposition from key players in the financial-services industry, particularly insurance companies.

The proposals, notably, were left out of the State of the Union address, a signal that they were being downgraded in importance within the administration. And Mr. Bush made no significant mention of them last week when he visited Fidelity Investments's sprawling office complex in Merrimack, N.H. Instead, Mr. Bush used the stop to promote his plan to make tax cuts permanent. "The permanent tax cut is the No. 1 economic priority," a senior administration official said Sunday. "That's why it gets mentioned daily and hourly." The savings proposals still enjoy support within some pockets of the administration, notably the Treasury Department...