The deficit is high, the debt is growing, the war’s financial costs are exorbitant, and the nation is just coming to grips with the need for a sizable investment in the nation’s bridges and infrastructure.
Given this environment, the president has a plan: more tax cuts.
President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.
Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was “inclined” to send a corporate tax package to Congress, although he expressed uncertainty about its political viability.
“Uncertainty”? I realize congressional Dems haven’t delivered many victories on military and/or national security policy lately, but there is simply no way Congress is seriously going to consider another irresponsible tax-cut package. That Bush would even recommend it suggests his connection to reality is tenuous.
What on earth could the president be thinking? Apparently, he’s going for tax cuts because he’s run out of other ideas.
The focus on economic issues on Bush’s last day in Washington before leaving town today for most of the rest of the month reflected a White House strategy to confront Democrats on tax and spending issues. With most of his second-term domestic legislative agenda in tatters and his strategy in Iraq under bipartisan fire, Bush appears eager to return to familiar issues that animated the beginning of his presidency and might rally disaffected Republicans behind him again.
Fascinating. Bush has no policy agenda to speak of, and can’t think of any new ideas. So, he’s apparently come to the conclusion that he should seek corporate tax cuts, not because they’re needed, but because he has nothing else to offer. He’s like a jukebox that only plays one song.
Speaking of the nation’s finances, the downturn in the housing market has caused quite a bit of unease among economists and investors. To help soften the blow, a variety of experts are calling on policy makers to allow Fannie Mae and Freddie Mac to buy mortgages and mortgage-backed securities, and consider bailouts of lenders threatened by the subprime home-loan crisis.
Bush rejected both ideas out of hand.
Bush threw cold water on proposals to have Fannie Mae and Freddie Mac come to the rescue: “The first thing we back is reforming these entities. It’s time to get them to focus on their core business in the first place. And we put forth a reform plan. . . . Let’s get them reformed first, and now is the time to get it done.”
Some analysts argue that Fannie Mae and Freddie Mac already have the ability to pump more money into the troubled mortgage markets. Instead of buying more mortgages, they could package them into securities for sale to other investors, and the backing of the government-chartered firms could give investors the confidence to buy the securities, analysts say.
Sen. Charles E. Schumer (D-N.Y.), a member of the Senate banking committee, said some on Wall Street are “on the edge of being panicked” about mortgage markets. “There’s a prominent notion that the regulators should get together and do something,” he said. “And a good number of people think Fannie and Freddie are the answer, including some very conservative people.”
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said if Fannie Mae and Freddie Mae owned the mortgages or mortgage-backed securities, they would be better able than other investors to renegotiate terms to prevent borrowers from losing their homes.
Frank said it is the White House that has held up reform of the companies by opposing legislation the House passed this year to create a stronger regulator for Fannie Mae and Freddie Mac.
Once in a while, I have to wonder if the president just doesn’t like America.