Bush’s Treasury Department goes off-message — again

July 26, 2006

Two weeks ago, a [tag]Treasury[/tag] Department report made clear what was already pretty obvious: “tax cuts do not come remotely close to paying for themselves.” Yesterday, Treasury undermined the administration’s message on [tag]tax cuts[/tag] again, this time reporting that — surprise, surprise — the cuts have costly consequences.

The federal government will need to either cut spending or raise taxes down the road to pay for extending [tag]President[/tag] [tag]Bush[/tag]’s recent tax cuts, the Treasury Department said in a report released yesterday, dismissing the idea popular with many Republicans that such sacrifices can be avoided. […]

[T]he Treasury’s view reflects “a recognition the federal government has to finance the tax relief” to avoid a rise in government debt, Robert Carroll, deputy assistant secretary for tax analysis, said in an interview.

The report stressed that the economic effects of extending the tax cuts “depend crucially on whether they are financed by lower [tag]spending[/tag] or higher [tag]taxes[/tag] in the future.”

Leonard Burman, a Treasury official in the [tag]Clinton[/tag] [tag]administration[/tag] and now the director of the Urban Institute’s and the Brookings Institution’s joint Tax Policy Center, said, “All of the hard questions are swept under the rug. We’ve increased spending and cut taxes, which is politically a very effective strategy. But in the long run, the effect on the economy is a disaster.”

You don’t say.

Wow – there are actually folks working in the federal government these days that will still tell the truth. There is hope for our collective future! Musta run out of Kool-aid.

  • The simple fact is that there are not enough kool-aid drinkers to run the whole executive branch. That’s why they make them public affair officers and inspector generals. That way they can control the flow of information out of the departments and punish anyone who jumps the walls.

  • “Borrow and Steal” (until reality catches up) is the Republicans’ answer to the Democrats “Tax and Spend” (are far more responsible policy which actually benefits all the people).

  • Treasury is “off-message” (from Bush’s perspective) because Henry Paulson is in there now and he’s a grown-up, if not actually reality-based.

    I wonder how long it will be before the Pod People get hold of him?

  • It’s nice to see a dose of reality, but …

    … I wonder if they’re looking at a very real chance that they’ll lose one or both houses of Congress in November, and they want to start shifting the debate now to say, sorry, no room to restore the massive cuts we’ve made in Medicaid, tax enforcement, environmental programs, student loans, etc etc etc because, hey, we’re in a fiscal crisis, and we’ve been saying it for a while now. And of course they’ll never budge on reversing the tax giveaways, and will have enough votes even in a Dem Congress to ensure they’ll never have to.

    Never, never, never underestimate the capacity of this administration to turn every policy statement into a political maneuver. Paulson I’m sure really believes what he’s saying, but the point is that Rove has allowed him to say it because he sees that, as we enter the lame duck years, it’s time to entrench and consolidate the admin’s accomplishments, viz the rape of the federal government.

  • My guess is that the Treasury Department will suddenly have “budget cuts” that will cut their number of analysts in half, much like they did with the estate tax lawyers in the IRS. No one will tell Bush his tax cuts don’t help this country ever again!

  • The media will now tell us there’s some debate over whether tax cuts actually have to be paid for, or if they will magically pay for themselves.

    Unfortunately, the average American believes in magic.

    And that is why we’re screwed.

  • This is actually brilliant in a way for the GOP… They will lose both houses and even the presidency, and the Dems will be forced to raise taxes to clean up the mess. The GOP will use that to rally themselves, and it will be powerful.

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