Tax cuts leave shredded safety net
We have for many years been bombarded with propaganda warning us of the dangers of big government. We seemed almost to have reached a consensus that the stock market would continue on its merry upward course indefinitely if only the state would stop interfering.
Today the mood has changed radically. The damage, both material and moral, inflicted last month by terrorist attacks on New York and Washington, is enormous. Massive public intervention is essential, both to help the many who have been directly affected and to stimulate the faltering economy.
On the need for government action there is unanimity. But there is deep division regarding the form it should take. Just a week after the Sept. 11 catastrophe, The Wall Street Journal proposed one option. It told the president to use the unique political climate to assert leadership not only on foreign affairs but on home affairs, too. It specified where he should start -- more tax cuts, drilling for oil in Alaska, Fast Track authority to expand to the entire hemisphere the disastrous NAFTA benefits for the transnational corporations, and raids on the Social Security surplus.
President Bush was obviously reading The Wall Street Journal. Using the wave of fear and anger and the intensification of the already deteriorating economic situation that followed the pulverization of New Yorks twin towers, he is now rolling back the nations already-mangled social services and further expanding the bloated military. On Oct. 24, the House passed 216 to 214 his tax cut bill, which will cost us $159 billion over 10 years.
For the ultra-rich and prosperous giant corporations, which get the bulk of the cuts, it is good news. Long-term capital gains drop once more, from 20 to 18 percent. The airlines, which already got $5 billion after Sept. 11, get another $15 billion. Enron of Houston, which made billions because of energy deregulation in recent years, gets $254 million. It does not matter that the Securities and Exchange Commission is investigating it for falsifying reports. The company was the biggest contributor to Bushs election campaign.
The unemployed, though, get a paltry 3.2 percent.
One serious result of these cuts is that 44 states and the District of Columbia will lose $5 billion each in tax revenues. Because states must balance their budgets, they will be forced to make new cuts in social services. Rep. Charles Rangel, D-N.Y., got it right when he described the bill as a very horsy horse-and-rabbit stew -- one horse, one rabbit.
Meanwhile a long cold winter awaits the poor as many lose jobs and confront a shredded safety net.
Far different from the solution to the crisis offered by The Wall Street Journal and endorsed by the administration is that presented in a letter sent to the president Oct. 18 by the leaders of the countrys major religions. The letter -- signed by the heads of the Conference of the Major Superiors of Men and the Leadership Conference of Women Religious, the major Protestant denominations, the Islamic Society of North America and the Union of American Hebrew Congregations -- pleads for the 31 million Americans who live with hunger.
With the economy sputtering and lay-offs mounting by the tens of thousands, those at the bottom are hardest hit. They have no medical help. They have no money to pay their utility bills this winter. Moral as well as social reasons demand that they be put first. The federal minimum wage should be increased by $1.50. More money, these interfaith religious leaders urge, should go to the Food Stamp Program and to the Special Nutrition Program for Women, Infants and Children, often referred to as the WIC.
The nutrition program was already grossly underfunded before the Sept. 11 crisis. According to the Washington-based Center for Budget and Policy Priorities, the underfunding in last Julys House allocation was such that 345,000 qualified children and infants had to go undernourished. With todays increased caseload, even more will stay hungry this winter.
The Sept. 11 crisis has created yet another unanticipated problem. The magnificent national response -- more than $1.2 billion -- to the enormous suffering has siphoned off charitable contributions that would otherwise go to aid agencies. All of them are taking in less than is normal as winter closes in.
In an Oct. 30 editorial, The New York Times urged the Senate to block the House measure and insist on a radical reversal of priorities. Several senators have taken initiatives in this direction. Sen. Edward Kennedy, D-Mass., for example, has put forward an alternative bill that would help low-wage workers and the unemployed.
For the Senate at this time, a reversal of priorities -- and government intervention to aid the needy -- is both an opportunity and a historic duty.
National Catholic Reporter, November 9, 2001