Dark Bilious Vapors

Consider this from the NY Times about What the Corpse Profiteers are Really Looking For…

Taking Full Responsibility

President Bush didn't say the other night how he would pay for his promise to rebuild the Gulf Coast states.

Allow us to explain: Every penny of aid approved by Congress so far and all subsequent aid - perhaps as much as $200 billion - will be borrowed, with most of it likely to come from Asian central banks and other foreign investors. That means additional interest of about $10 billion a year indefinitely.

The bill will hit current and future taxpayers in the form of higher taxes or cuts in government programs, or both.

Don't get us wrong. In the main, it makes sense to borrow for huge, vital and unexpected projects (World War II comes to mind). Such borrowing spreads the immense costs over generations, all of which presumably benefit from the extraordinary spending.

The problem is that the United States was deep in hock before Katrina - and for many of the wrong reasons. Unless Congress changes the pre-Katrina priorities laid down by Mr. Bush, necessary borrowing for Katrina will occur on top of unjustified borrowing. The resulting deficits could create deep economic distress, including higher interest rates, slower economic growth, future tax increases and constraints on the government's ability to be responsive, both to crises and to everyday needs, like health care. Growing deficits also pose a security threat because increasing foreign indebtedness risks eroding the nation's position in the world.

Cutting taxes for the rich is the most glaring of the wrongheaded reasons to pile debt upon debt. Since 2001, Congress has passed tax and spending legislation totaling $1.7 trillion. Of that total, tax cuts for people who make more than $200,000 a year, the top 3 percent of the income ladder, have accounted for nearly 20 percent - or about $330 billion.

High-end tax cuts were not a wise policy during the shallow recession of Mr. Bush's first term and they're certainly not called for now. Unpaid-for tax cuts only cause more government borrowing. That takes money from government programs and taxpayers of tomorrow and gives it to the rich of today.

So far, the signs are not good for how Congress will respond to Mr. Bush's promise to spend "unprecedented" amounts for Katrina. Last week, Republican leaders pledged to push ahead with more deficit-inducing tax cuts for the wealthy - costing up to $70 billion over five years. Their most cherished is an extension for two years of temporary low rates for dividends and capital gains, scheduled to expire in 2008. About half of those cuts would flow to people making more than $1 million a year.

At the same time, key lawmakers are already balking at borrowing for Katrina. "We must not let Katrina break the bank for our children and grandchildren," said Representative Mike Pence, Republican of Indiana, in a typical comment.

They have it exactly backward. The tax-cutting agenda is breaking the bank for our descendants, while impairing our ability to borrow responsibly today. Every dollar that is saved by letting the tax cuts expire as scheduled is one less dollar the nation will need to borrow for Katrina.

A day after his speech from New Orleans, Mr. Bush ruled out tax increases to help pay for Katrina.

That's unrealistic. And in any event, letting temporary tax cuts expire on schedule is not a tax increase.

It's the law of the land, which Congress wants to change. Now that Mr. Bush has ruled out new tax increases, he should also tell Congress to rule out new tax cuts for the rich. Taking responsibility for the response to Katrina means taking fiscal responsibility as well.

Karen on 09.19.05 @ 06:05 AM CST