The Tax Cut GAP
The $145 Billion economic stimulus tax cut proposed by President Bush has become temporarily stuck in Congress. While everyone agrees something must be done, here is where the GAP between the two parties lies.
Bush wants to pass an across the board tax cut so that everyone benefits. The Democrats want the tax cut to be narrowly applied to the nearly 50 million low income people in America who do not pay income tax, but do pay into the social security fund. It’s a safety net that will also stimulate the economy.The Dems want them to get the full rebate, with the expectation that they will spend it on necessary food and housing.
The economy is in urgent need of recovery, former Secretary of the Treasury Robert Rubin warned the 250 mayors attending the Conference of Mayors meeting in Washington DC.
The economy is slowing down, the jobless rate is going up, the foreclosure meltdown is spreading across all sectors of society, affecting everyone, from the middle class and wealthy to low income families. People are tightening their belts and preparing for the worst.
Rubin, a hero to many mayors, is remembered as a member of the Clinton Administration team who managed to bring the Federal budget into balance in the 1990s and even create a surplus.
Next week, the deficit-driven Bush Administration may try to point to the successful bi-partisan passage of the Energy Bill in December. However, the bill contains a staggering “welfare” stimulus of $280 billion for big coal. The goal of $280 billion in corporate welfare is meant to stimulate Wall Street investment in techology. The goal is to drive investment capital into development of new, unproven technology for carbon sequestration for coal-fired power plants.
By contrast, the bill contains a pittance for cities: $10 billion (still unfunded) to provide for block grants to promote energy conservation and weatherization strategies for America’s cities.
All in all, there seems to be a deficit of creative ideas in the upper reaches of government about how to solve and fund solutions at the local level.
While Bush makes deals to fund BIG oil, coal and nuclear solutions, the global economy is rapidly shifting under the feet of the average American citizen. Currently, $270 billion a year is going out of the U.S. to pay for foreign oil. Money that moves out of the country is also money that is not invested in local jobs, education, healthcare or infrastructure.
Until money and policy combine to make a green transition happen, we’d better get ready for the next Oil Shock.
Dependence on foreign oil, the mayors are told over lunch, is expected to rise from 59% today, to 65% by 2030.
Talk about an oil addiction…. Unless new leadership takes us in a new direction in 2009, we might as well bring out the lifeboats. However, if we wait until 2030, there might not be any birds left to guide us back to land.
