Monday :: Jan 3, 2005

Bush Postpones Tax Agenda To Gamble On Passing Social Security

by Steve

Bush plans to focus his near term agenda on Social Security privatization, and has decided to put off tax changes until he can use them as a midterm election club against Democrats next year. Rove and Bush have so overestimated their “mandate” that they feel they have the political capital to ram through privatization this year and then still come back next year to finally transfer the tax burden from the rich to wage earners before Bush is a total lame duck. But as I have opined earlier, similar to Clinton’s ill-fated decision to put off welfare reform to tackle health care first, Bush is rolling the dice with his alleged mandate that he can get both done.

The New York Times nailed Bush today on his deceptive campaign to sell privatization while he ignores other problems of his own creation in Medicare. I think that after this piece from the Times today and a similar opinion from the Post last week, other news outlets will take a long look at Bush and the GOP’s claims on the alleged crisis facing Social Security, and find them just as lacking as were the claims about Iraqi WMDs. As a result, Bush's efforts to mislead us again will face tougher sledding than Bush or Rove suspect, especially after it is known that the problem is lesser still if economic growth meets more reasonable expectations. Plus, there are signs that Congress will bog down over both Social Security and Bush’s efforts to stack the courts with right wing extremists.

And that makes the recent comments from the White House about scaling back their “we have a mandate” plans to make significant changes to the tax system all the more interesting. The business community has been seeking some of these tax changes for years, and won't be happy that Bush has now decided to put these on hold until next year while he drains his “capital” on the privatization gambit. Aside from Wall Street brokerage houses, Corporate America does not want enormous energy spent by the Administration on privatization when those energies and such capital could be spent on tax changes instead. It could be however that Bush is smitten with the notion of being the guy who undid FDR's legacy.

Some of the tax changes sought by the Administration, such as allowing each member of a family to have up to $5,000 a year in tax free accumulations in order to build wealth make sense. But under the Administration’s plans, the costs and revenue losses from these and other tax cuts that Bush and Corporate America want would be shifted to wage earners. Bush and his benefactors want another tax break, and to once again shift these costs onto the backs of the workers and lifted off the shoulders of the rich and corporations. No wonder Corporate America wants Bush to push tax “reform” first and to save privatization for next year. Yet Bush doesn't want it bad enough to put it ahead of undoing Social Security.

Yet it is possible that as more and more is known about what is actually being sought with both privatization and this grand tax dodge, Bush may get neither, and see his alleged capital and mandate squandered in another bit of second-term hubris. As wage earners fall farther and farther behind in Mr. Bush’s recovery, Democrats can effectively browbeat the GOP in next year’s midterms while Bush tries to sell such tax shifts and privatization scams to voters.

It couldn’t happen to nicer guys.

Steve :: 5:02 PM :: Comments (33) :: Digg It!