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INDIANAPOLIS. Touting his proposed budget as “an aggressive economic plan so people can go back to work,” President George W. Bush ended a three-city national tour to promote his latest tax cut with a visit to conservative Indianapolis on May 12-13. (“Jobs and economic growth plan, please,” Bush’s outgoing budget director Mitch Daniels pleaded with a local journalist.)
Despite the stated purpose, the carefully orchestrated event had all the makings of a dress rehearsal for September’s Republican National Convention in New York City, with more than half of Tuesday morning’s speech devoted to Terror and the endless war thereon.
In front of a hand-picked audience of 7,000 GOP functionaries, big-money contributors, political power brokers, and adulating Midwest fans—the “People of the New American Century”—Bush was met with flag-waving and cheers for even the most banal pronouncements.
The clamor was loudest when Bush asserted more promises about “hunting down terrorists”—this time in reference to Monday’s suicide bombing in Saudi Arabia, which killed 34, including 8 Americans. “These despicable acts were committed by killers whose only faith is hate,” he said. “And the United States will find the killers”—presumably referring to someone other than the killers, who have already committed suicide—“and they will learn the meaning of American justice.”
He has made the same promises about Osama bin Laden and the anthrax killer as well as about Saddam Hussein and his fabled Weapons of Mass Destruction. To date, his promises have come up short, but the crowd rose to give him yet another standing ovation. Fantasy sound bites such as “America is now more secure! The world will be more peaceful if the Iraqi people are free!” received the biggest cheers.
Bush’s hour-long speech was heavy with effusive faux-populist, heartstring-tugging homilies and ultra-light on any specifics of how his plan would stimulate the economy. Standing in front of a banner which read, “Tax Relief for Seniors,” Bush charmed the assembled faithful with his aw-shucks demeanor and regular-fella diction.
He played the Washington outsider role to good effect. “Sometimes in Washington you hear, ‘Well, we’re spending the government’s money.’ No, you don’t spend the government’s money—we’re spending your money,” he pointed out. And of course, he’s the hero who will “get Congress to act boldly on the plan to get more of your own money.”
His tax-cut plan will give “the people” back “their money,” he promised. “A family of four making $40,000 a year would see their federal tax bill go down $1178 a year,” Bush claimed. “That’s a thousand dollars not just for a year, but for years. That family can use their money the way they see fit. After all, it’s their money to begin with.”
Perhaps that family can pay down one of their credit cards with the windfall. But will they be the real beneficiaries of Bush’s costly proposal? Not likely, according to Indiana Fair Taxes for All Coalition. Nearly half of all Hoosier taxpayers will see less than $100 savings from Bush’s plan, while millionaires will pocket an average of $22,511 apiece.
Apparently the attendees don’t identify themselves with the $100 majority. They cheered when Bush—a son of wealth and privilege who has been bailed out of every failed business venture he lucked his way into—sang praises to the American entrepreneurial spirit. They howled with delight when the man who is proposing a $1.3 trillion deficit called for elected officials to “control spending.”
Insisting that “there needs to be fiscal sanity in Washington, D.C.,” Bush neglected to mention that his budget proposal would cost nearly $2 trillion over the period 20032013 (according to the latest figures from the Congressional Joint Committee on Taxation, posted at www.ctj.org).
Bush acknowledged problems in the business world. “Some CEOs around our country forgot what it meant to be responsible at their jobs.” He called for reform. “We expect responsible behavior in American corporate boardrooms.” He didn’t call for improved health and safety for American workers—whom he characterized as “the best in the world.” Neither did he encourage corporations to stem the flow of jobs overseas or to improve environmental stewardship. And he neglected to mention conflicts of interest between members of his Administration and companies profiting from the War on Terror. Instead, he encouraged firms to pay dividends. “It’s very important that we realize the reform aspects of encouraging companies to pay dividends,” he said. “Get rid of the double taxation of dividends and more companies will pay dividends.”
In Bush’s scheme, recipients of dividend income would then use the cash to buy goods and services or invest in businesses that might create new jobs. But those who don’t earn dividend income or whose savings are socked away in long-term retirement strategies won’t benefit. Only wealthy investors will.
Bush defends his plan with populist bravado: “You hear people all the time in Washington—they’ll say, ‘Well, this is only for a certain class of people.’ That’s the old tired stale class-warfare argument.”
How can he get away with making such claims? A big megaphone helps, says Max Sawicky, economist at the Economic Policy Institute in Washington, D.C. “A lot of people look forward to doing better than they’re doing now, so when you see tax cuts proposed for income you don’t have but aspire to, you support it.”
“Dividend income is income from capital and it’s very highly concentrated among a small minority of people,” he notes. “Capital income tax relief is not going to affect most people.”
So what about Bush’s claim that removing the “double” tax on dividend income will help seniors? “Sure,” Sawicky says, “if they’re very wealthy. I guess he’s referring to the dividend exclusion.” Whatever Congress passes will be different from what the Administration proposes, he adds.
Sawicky quotes from the group Citizens for Tax Justice, which states on its Web site, “Three-quarters of the elderly would get absolutely nothing from Bush’s proposed dividend tax exemption. That’s because only one in four seniors receives even a dollar in taxable dividends.”
CTJ further states, “For the 70 percent of elderly taxpayers with incomes below $50,000, the average dividend tax cut would be only $44.”
Valerie Martin, Indiana coordinator for Fair Taxes for All Coalition—a group composed of unions, senior citizens organizations, consumer advocates and faith-based communities, puts it another way. “There’s not enough good stuff in [the proposed] tax cuts. It’s just reckless. Social Security, healthcare, Medicare, education, homeland security—all these things need priority over tax breaks for the wealthy.”
Martin helped organize the “Baloney and Crumbs” event held after Bush’s speech on the other side of the Indiana State Fairgrounds. A mere 35 folks showed up to hear speakers address the idea that “there’s plenty of money for millionaires in the President’s tax cut plan—and nothing but baloney and crumbs for seniors.”
Brenda Upchurch, local United Auto Workers retiree representative, called Bush “the President-select” as she expressed her concern about programs that truly help retirees. “UAW’s main focus is prescription drugs, and protecting Medicaid and Social Security,” she said.
Bush’s budget proposal would undermine these programs when they’re needed most, Upchurch said. Her group has aided seniors by taking busloads to Canada to purchase prescription drugs at deep discounts and by promoting Web sites and mail order houses that offer attractive pricing. “So what did Bush do? He asked the FDA to shut down those Web sites,” she said.
Paul Severance, executive director of United Senior Action, a Hoosier senior citizen advocacy group, echoed Upchurch’s concerns in a statement read at the counter-event. “The United States is the only industrialized nation in the world that does not have prescription drug coverage for its retirees.” The group claims recent studies indicate nearly a quarter of all American seniors are unable to take prescribed medicines because they cannot afford to buy them.
So much for the “hard-working Americans” who are at the end of their working lives. What about those just beginning their careers?
Jared Bernstein, also of the Economic Policy Institute, recently released an “Economic Snapshot” of the job market for young college graduates, and found a particularly weak labor market and a decline in employment opportunities.
Miriam Pemberton, a fellow at the Institute for Policy Studies, points out, “Two years ago we had the largest tax cut in history, and since then unemployment has soared to near 6 percent.”
In his speech May 13, Bush promised to “add a million-plus jobs by the end of 2004.” It’s a promise Max Sawicky describes as “completely fraudulent according to their own model. They don’t tell you those jobs are jobs that would be created anyway. They are not a net addition.”
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Bush’s budget-savant, “My man Mitch” Daniels, was undoubtedly a big reason the President included Indianapolis on his junket—that and a particularly friendly congressional delegation in the crowd, including putative Democrat Sen. Evan Bayh. Daniels recently resigned his post and in all likelihood will run for governor of Indiana in 2004. Since he’s still technically a federal employee, Daniels hasn’t begun campaigning, but “MITCH” buttons were much in evidence and Bush couldn’t resist telling the crowd, “Washington’s loss will be a gain for the people of Indiana.”
The huge costs of the Bush administration’s budget proposal may finally rob Daniels of his undeserved reputation as a penny pincher. Sawicky says, “Mitch was a farce. They go in there and pass a huge tax cut and then talk about fiscal responsibility. It’s ridiculous—a gigantic disconnect. It’s hard to grasp.”
Actually, everything about Bush’s aura of leadership, fiscal responsibility, faithfulness and humility is hard to grasp. But unless the Democrats can enlarge their megaphones, produce a platform that reflects average-American concerns about the economy, education, healthcare and security, and come up with a credible candidate who can articulate the message, we’re likely to see four more years of record unemployment, lavish military spending, corporate malfeasance and media conglomeration.
Don’t expect to hear much criticism of Bush’s economic plan. At Tuesday’s event at the fairgrounds in Indianapolis, national media journalists filed their stories from the Sheep Barn.
Thomas P. Healy is a freelance journalist in Indianapolis. He can be reached at: email@example.com