Call it the $900 billion mystery.
As Congress begins debating next year’s budget this week, Democrats are promising generous new federal spending on children’s health care, education and veterans. All, they say, without raising taxes.
“It’s almost like the Wizard of Oz tax policy here,” said Sen. Judd Gregg, R-N.H. “There’s somebody behind the curtain; we haven’t seen who it is, but that person is supposedly going to have the answers as to how we’re going to get this new revenue.”
Asked where he expects to find all this new revenue, Senate Budget Committee Chairman Kent Conrad, D-N.D., said it would come from collecting outstanding tax debts and closing illegal tax shelters.
Republicans suspect that Democrats plan to get the money by eliminating President Bush’s tax cuts, which would yield about $916 billion. In fact, budget proposals in both the House and the Senate are based on the assumption published by the nonpartisan Congressional Budget Office that the tax cuts will expire.
Republicans say doing away with the cuts would result in a tax increase four times greater than any in U.S. history.
“The last time we saw a tax hike even remotely this big was in the Democratic-controlled Congress of 1993,” said Senate Minority Leader Mitch McConnell, R-Ky., noting the anger among voters the following year that swept Republicans into power. Later, then-President Bill Clinton blamed the historic losses on that tax increase.
“Well, if President Clinton thought that tax hike was too much, he’d choke on this one,” McConnell said on the Senate floor.
Conrad shot to his feet.
“We don’t want to let people’s imaginations run wild here,” he said. “Let me make this flat-out statement: We have no proposed tax increase in this budget resolution.”
Conrad isn’t ready to say that the tax cuts will expire. His budget “keeps taxes low … and it contemplates no tax increase,” he said.
But even some Democrats are growing weary of being tarred as big taxer and spenders.
Sens. Max Baucus of Montana, Ben Nelson of Nebraska and Mary Landrieu of Louisiana — all Democrats from conservative states — have quietly begun writing proposals that would preserve at least some of the most popular tax cuts aimed at middle-class voters.
A House panel, meanwhile, is drafting its own budget proposal that mirrors the one offered by Senate Democrats. A vote on that was expected late Wednesday.
