Tags: Kennedy: | Stop | Tax | Cut | Spend | More | Government

Kennedy: Stop Tax Cut, Spend More on Government

Wednesday, 16 January 2002 12:00 AM

"Some suggest that the nation is returning to business as usual, to politics as usual," Kennedy, D-Mass., observed Wednesday at the National Press Club. "I reject that view."

The senator then reiterated a list of increases and expansions in government social programs that he has been calling for, in some cases for decades. He proposes to pay for those programs by rolling back part of the 2001 tax cuts.

"We can and should postpone a portion of the future tax cuts," Kennedy argued. "My proposal would put on hold approximately $350 billion in future tax breaks."

President Bush, who has said he considers Kennedy a friend and has praised him lavishly for helping pass a multibillion-dollar education plan, said: ``It'd be a huge mistake. It's bad for American workers. It'll hurt when it comes to creating jobs. And so I strongly disagree with those who want to raise taxes here in Washington, D.C.''

Rep. Mark Foley, R-Fla., responded to the proposal with a tongue-in-cheek press release "praising the courageous Senator Kennedy" for the speech.

"Ted Kennedy is the only Democrat so far," Foley said, "who has had the guts to say what they all are secretly trying to do: Raise taxes on Americans."

The only options available to pay for his list of "major new demands on our national resources," Kennedy claims, are to either rescind part of the 2001 tax cuts, or "raid Social Security and Medicare, and cut health, education and other vital goals."

He made no mention of reducing spending in other areas as a third option to fund what he calls "the great unfinished business of our society." That "unfinished business" includes:

In addition to the programs requiring new funding, Kennedy proposed the following new federal regulations:

Kennedy's plan would "postpone future reductions" in the tax rates for families with a total family income of $65,000 or more. Neither Kennedy's speech, nor any of the supporting materials distributed by his staff, made mention of a proposed date to reinstate the tax cuts.

The plan would also repeal all of the planned future reductions in the estate tax. Conservatives refer to that particular tax as the "death tax" because it taxes income and property, on which taxes have already been paid, a second time at the owner's death.

Grover Norquist, head of Americans for Tax Reform, says the tax issue would alienate "sensible moderate Democrats from the liberal leadership" of the party.

"'Repealing the tax cut' is simply another way of saying 'raising taxes,' and raising taxes during a recession is tantamount to economic suicide," Norquist said. "America hasn't been subjected to such a display of high-level economic illiteracy since the Hoover administration."

Norquist blames the Hoover tax increases in the early 1930s for turning "a garden-variety downturn into the Great Depression."

But Kennedy claims the "giveaways" and "bonanzas," as he refers to the tax cuts, were a mistake in the first place.

"We cannot now afford, if we ever could, the $1.7 trillion 'cost' of the tax cuts enacted last year." He insisted that rolling back the tax cuts "will actually help the economy."

House Republican Conference Chairman J.C. Watts, R-Okla., disagrees. He says Congress should focus on creating jobs, rather than repealing tax cuts, during a recession.

Kennedy's "proposal will threaten family farms, grab money out of the hands of new parents, sock married couples with a tax penalty, and force workers to give more of their paychecks to the federal government," Watts said.

"With over 700,000 Americans out of work since September 11, the last thing Congress should do is raise taxes and make it harder for people to go back to work," he added.

The National Federation of Independent Business (NFIB) likened Kennedy's plan to trying to recharge a low car battery by turning on the car's headlights.

"Without last year's historic tax relief, this recession would have undoubtedly been much worse," said NFIB Senior Vice President Dan Danner.

NFIB says the tax cuts allowed small business owners and consumers to keep and spend more of their own money. The group calls such action the "right recipe for economic revival."

"Turning around and picking those pockets at this critical time would have exactly the opposite effect," Danner warned.

But Kennedy defends his plan, saying the tax cuts he wants to "postpone" are only those for the "rich."

"We can achieve $350 billion in savings by avoiding these future reductions in tax rates paid by the wealthiest taxpayers in the highest income brackets," Kennedy said.

That philosophy flies in the face, however, of the largest tax cut ever proposed by a U.S. president, according to Steve Moore, president of the Club for Growth. That president was Kennedy's brother, John Fitzgerald Kennedy.

"JFK argued that high tax rates were one of the primary deterrents to prosperity," Moore asserted.

President Kennedy believed that without tax cuts, "it is a paradoxical truth that we will never reach our industrial potential to balance the budget." He also stated publicly that tax cuts should include all taxpayers, even the wealthiest, because "a rising tide of prosperity will lift all boats."

In addition to history, public opinion seems to be against Sen. Kennedy. A poll conducted by the Gallup Organization, Jan. 7 through 9, showed that only 28 percent of respondents favored postponing or repealing the tax cuts, and 67 percent opposed such action.

Kennedy seemed to be aware of that poll as he closed his speech.

"Of course, some will disagree with some of the proposals I've made today," he concluded. "Some no doubt will disagree with most or all of them."

The ballroom of the National Press Club was filled for a brief moment with the nervous laughter of die-hard Kennedy supporters, followed by polite applause.

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Some suggest that the nation is returning to business as usual, to politics as usual, Kennedy, D-Mass., observed Wednesday at the National Press Club. I reject that view. The senator then reiterated a list of increases and expansions in government social programs that...
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Wednesday, 16 January 2002 12:00 AM
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