I knew it would not last long. The momentum for tax cuts and reducing the size of the federal bureaucracy came to an end when President Bush announced his plan to develop a new Homeland Security Department. As I heard his announcement, my first thought was, “I feel a tax increase coming.”
Last year, President Bush pushed through Congress a tax cut aimed at boosting the U.S. economy. Millions of Americans found a check in the mail. Even though most taxpayers only received a modest sum of money, the rebate helped keep Americans in a spending mentality. The tax cut provided a huge psychological boost to American consumer spending. Cutting taxes came back in vogue; even some moderate Democrats joined the effort.
Since 9-11 and the enormous media coverage about our vulnerabilities as a nation, everything has changed. The pendulum has swung the other way. Almost as soon as President Bush announced his plan, leaders in Congress began talking about the need for more money. Democratic Senators Joseph Biden, chairman of the Foreign Relations Committee, and Kent Conrad, Budget Committee chairman, said they are skeptical of the administration’s claim that the new department will not increase the cost of government. According to published reports, senators from both parties contend that Bush’s proposal is just a starting point. Translated, this means that lawmakers from both parties will use the war on terrorism to expand the federal bureaucracy and increase taxes.
The White House hopes to meld several agencies together, which in the long run would not result in significant spending or personnel increases. Unfortunately, it seems that everything the government does comes in over budget. What does this mean for tax cuts, especially the permanent repeal of the estate tax?
The federal government is currently running a budget deficit. Democrats blame the Bush tax cuts; Republicans blame excessive spending and a “runaway” government bureaucracy. The President has already said that he will not veto legislation setting up the department if its expands the size of government. The administration wants to secure the homeland while keeping spending under wraps. This will not be easy. Members of Congress will not want to be viewed as opposing anti-terrorism legislation – especially if another attack occurs. Look for liberals and big government supporters to demonize those pushing to repeal the estate tax and expect their patriotism to be questioned.
The “logic” goes something like this. If you really love this country, you will want to protect it, and the only way to secure our borders is to build up our defenses, which takes lots of money. Thus, if you support any type of tax cut, you are against the war on terrorism.
Now that President Bush has opened the door, I expect the supporters of big government to push for anything and everything they can get. And if you stand in their way, you will be labeled as un-American.
The current government budget fiasco highlights how difficult it can be to reach the proper equilibrium as a society. We tend to stay in ditches instead of being firmly planted on the road. Consider the current state of organized labor. A hundred years ago, unions were needed to keep workplace conditions safe. With everything from child labor to a lack of safety precautions, working conditions then were very dangerous. Today, the pendulum has swung the other way. Organized labor champions rules and negotiates deals, that have led many multinational corporations to close up shop in the United States. These companies have relocated to countries where unions and government regulations are not burdensome. The OSHA ergonomic rule illustrates what happens when good intentions get out of control.
Finding the equilibrium on anything can be difficult. We face this dilemma everyday in our personal life. How can we balance work, faith, and family when there are only 24 hours in a day? Until we recognize our own destructive tendencies and deal with the extremes, we as individuals and as a society will continue to struggle.
