The Bush Tax Sham

The Bush Tax Sham

On January 7 George W.


On January 7 George W. Bush went to the Economic Club of Chicago to preview what he has been calling his “jobs and economic growth package,” which he will formally present in his State of the Union address later this month. The Bush plan repackages old proposals to aid the wealthy (accelerate some of the tax cuts for the rich already passed) and newly fashionable ones (exclude dividend income from taxation), while throwing the rest of us only a few small sops like increasing the childcare credit and finally supporting extension of unemployment benefits to workers whose benefits recently ran out. Bush and his advisers are clearly attempting another neat bait-and-switch: providing more giveaways to the wealthy and corporations over future decades but selling the package as a quick economic stimulus that will help working Americans find jobs and economic security.

The Bush economic proposals are a sham. They make the tax system more unfair, they starve the public sector of resources for needed public investment and they will not revive growth, spur corporate investment or create jobs. Progressives should say so loudly and clearly. But they must also make sure the Democratic Party’s plan for jobs and economic growth offers a real alternative to the Bush program.

Numerous 2002 election post-mortems by analysts like pollster Stan Greenberg ( and others have demonstrated how, especially on the key issue of the economy, Democrats failed to give voters a reason to vote for them and against Republican candidates, with disastrous results. This time progressive groups aren’t waiting for the Democrats. A coalition led by the Campaign for America’s Future, AFSCME and other national organizations has united behind a progressive plan for growth and jobs written by Larry Mishel, president of the Economic Policy Institute ( The plan would stimulate consumer demand through a “wage bonus” tax cut that would put money into the pockets of middle- and low-income Americans. It would directly aid the states, where the worst fiscal crisis in decades is now forcing painful cuts in jobs and services. The plan would also extend unemployment assistance to the jobless and invest in public needs–like school construction–that can put people to work quickly. Altogether, the elements of the plan could quickly inject $175 billion in stimulus into the weak economy, which EPI estimates would create 1.5 million jobs. And it would do all this without making the tax system more unfair and without giving away a big part of the tax base.

Shortly after the election, progressive leaders went into action to urge Congressional Democrats to rally behind the Mishel stimulus plan or something like it. Calls from progressive groups and labor lobbyists convinced new House minority leader Nancy Pelosi to invite Mishel to present his plan to more than a hundred members of the Democratic caucus at a special December 9 economic forum. The Campaign for America’s Future, labor groups and others have reached out to Senate Democratic leaders and to the Democratic Governors Association. On January 6 House Democrats released a modest version of the Mishel plan, and if we keep pushing, there’s a good chance that all three Democratic proposals (Senate, House and governors) will be similar, in size and detail, to the Mishel plan.

Getting Democrats to agree on a plan won’t mean much, however, unless progressives mobilize to show Democrats how to fight for it. There are encouraging signs. When the Campaign for America’s Future called a meeting before the holidays to talk about an independent mobilization to fight the Bush initiative and to promote the progressive growth and jobs program, leaders of more than seventy national organizations showed up. Plans are being laid for a quick and intense coalition campaign that can operate not only in Washington but in communities all over the country–representing labor, women, seniors, churches, civil rights groups and many other citizen action organizations.

The informed press coverage of the Bush plan acknowledges most of the points we want to make about its inadequacy as an economic stimulus. Some reporters even describe it as more of a payoff to wealthy supporters than a real economic program. But then most go on to say that Bush is likely to get just about everything he’s proposing, given his victory in November with GOP control of both houses of Congress.

Progressives have to give the press something else to report: that there is growing outrage among the American people at a Bush program that claims to be for “growth and jobs” but that rewards only the GOP’s wealthy and powerful supporters. We should spearhead a grassroots campaign to put public pressure on Democratic senators to support progressive tax cuts and not the regressive, wasteful ones. And to persuade some moderate Republican senators to vote in the national interest against any plan that will undermine the future fiscal solvency of our country. In short, we need to show Americans that progressives are building a movement (and a party) that knows what it is fighting for.

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