Snow claims Greenspan backs tax cuts

Wasn't Snow supposed to be an improvement over O'Neil as treasury secretary? Well, he seems to be having another "O'Neil moment" as he claims, against all evidence, that Greenspan backs Bush's tax cut plan.

A month ago, the White House was said to be furious with Alan Greenspan for giving what a Democratic leader called "the kiss of death" to President Bush's $726 billion "job and growth" tax cut.

Greenspan told lawmakers in February that the tax cut isn't needed as a short-term stimulus and actually may be harmful in the long term if it means budget deficits grow out of control.

[...]

But Snow told reporters Wednesday that a careful reading of Greenspan's testimony revealed it to be "entirely consistent with seeing the president's package approved."

In any case, while the president's tax cut may be in deep water, some sort of plan will pass. Breaux is leading the charge with a "centrist" plan that scales back the tax cut from $726 billion to $350 billion, and he claims he has the votes to pass it (including the votes of GOPers Chaffee, McCain, Snowe and Voinovich).

Hence another victory for Bush's tax cut strategy -- propose something so outrageously huge, that the "compromise" "scaled-down" plan sails through.

Never mind Greenspan urged Congress to halt it's rush toward more tax cuts:

Greenspan devoted more than half of his semiannual testimony on the state of the economy to a lecture on the benefit of fiscal discipline. Greenspan said he favored reforms in dividend tax policy, but only if they were "revenue-neutral."

"Contrary to what some have said, [a growing deficit] does affect long-term interest rates," Greenspan said. "It does have an impact on the economy, unless attended."

Get ready for higher deficits, Mr. Greenspan.

Posted March 12, 2003 12:58 PM | Comments (9)