Cuts and consequences

There’s a long-standing notion that the Senate is the deliberative side of the United States Congress, the House more given to headlong rush. The current status of President Bush’s tax cut in those chambers illustrates the difference.

The fundamental concern in Congress and among the public about the 10-year, $1.6 trillion deal is, of course, that much of the Bush tax cut gets implemented gradually during the next five years, but most of the projected budget surpluses to pay for it aren’t expected to materialize until the second half of the decade. A tax cut of some size is in order, but the backwards sequence of events the president proposes moves the full $1.6 trillion from giving taxpayers their money back to floating a cash advance with no collateral.

This particular Senate, with power evenly balanced between the parties, has been advertised since Election Day as one in which moderates will star and its lives up to the billing with its approach to this particular issue. A bipartisan group of 11 centrists – six Democrats and five Republicans, including Maine Sens. Olympia Snowe and Susan Collins – stepped forward Wednesday with a proposal that the tax cut include a “trigger” mechanism, a means by which the phased-in reduction in tax rates is tied to economic performance.

The concept has its roots in a suggestion made by Federal Reserve Chairman Alan Greenspan. It was the underreported part of the speech Mr. Greenspan gave early this year supporting a tax cut; it’s good that 11 influential senators were listening closely.

The arguments for a trigger are obvious: 10-year projections rarely work out just right; the sudden collapse of state revenues throughout the country illustrates how fickle revenue can be; the explosion in personal debt in this country in recent years would make an explosion of federal debt a calamity.

In contrast to this recognition that things don’t always work out and that a good Plan B is sometimes necessary, there’s the House, where Speaker Dennis Hastert is trying to ram the tax cut hastily through before anyone has time to look at it too closely, or to look at all at the skewed priorities of the accompanying spending plan, with its meek approach to health care and education, and its unconscionable dipping into Medicare and Social Security trust funds.

Speaker Hastert’s tactic is to make the president’s plan seem unstoppable, but the result could be disastrous unanticipated consequences, with all but the wealthiest Americans being sold small-scale, long-term tax relief and getting deficits and recession instead. After the bill’s mad rush through the House, the final version will be negotiated in the Senate, where, thankfully, longstanding notions still mean something.