The new Democratic majority begins dancing the next phase of the tax-and-spend minuet in the House of Representatives today. Following the example set by their Senate brethren last Friday, House Democrats will adopt a budget resolution containing the largest tax increase in U.S. history amid massive national inattention.
Nobody's tax payment will increase immediately, but the budget resolutions set a pattern for years ahead. The House version would increase non-defense, non-emergency spending by $22.5 billion for next fiscal year, with such spending to rise 2.4 percent in each of the next three years. To pay for these increases, the resolution would raise taxes by close to $400 billion over five years -- about $100 billion more than what was passed in the Senate.
It had been assumed that the new Democratic majority would end President Bush's relief in capital gains, dividend and estate taxation. The simultaneous rollback of Bush-sponsored income tax cuts was a surprise. This reflects Democrats' belief that they can survive a long-term commitment to bigger government. Here is an audacious effort to raise the banner of fiscal responsibility while increasing spending and taxes.
This Democratic strategy is encapsulated in what Harry Hopkins, President Franklin D. Roosevelt's main man, is alleged to have told a friend at New York's Empire City race track in August 1938: "We will spend and spend, and tax and tax, and elect and elect." While Hopkins denied ever saying those words, they represented successful Democratic government and political strategy for the next two decades.
John F. Kennedy, reclaiming the White House for the Democrats for the first time in eight years, altered the pattern in 1961 with massive tax cuts. But Bill Clinton, taking power in 1993 after 12 years of Republican rule, returned to the Hopkins formula by proposing and passing what then was the biggest tax increase ever. It was "tax" and "spend," but not "elect." The Clinton tax contributed to the Democrats' loss of control, for the first time in 40 years, of both houses of Congress.
Why, then, having just returned to power, are Democrats going down this dangerous path again? Indeed, while Clinton had to twist arms in 1993 to get a one-vote margin in each house, Democrats now obediently fall in line on tax increases. Their conduct is explained by faith in a Democracy Corps poll conducted March 20 to 25 showing that voters associate Democrats with "fiscal responsibility" more than they do Republicans, 44 to 36 percent.
An architect of that impression is Sen. Kent Conrad, the austere Democratic chairman of the Budget Committee. His resolution "restores fiscal responsibility by balancing the budget by 2012," he said during debate last week.
Conrad claimed: "We try to keep taxes low." In fact, Conrad is the consummate tax collector, having spent the 12 years before his 1986 election as an assistant tax commissioner and then tax commissioner in North Dakota. His voting records in 2004 and 2005, respectively, were rated 90 and 85 percent liberal by the left-wing Americans for Democratic Action. The National Taxpayers Union put him at 17 and 16 percent in 2005 and 2006.
The bill set to reach the House floor today (resembling the Senate version) would raise taxes an average of $1,795 on 115 million taxpayers in 2011. Some 26 million small-business owners would pay an average of $3,960 more. The decreased number of Americans subject to income taxes would all pay higher taxes, and 5 million low-income Americans would be returned to the rolls.
Rep. Paul Ryan of Wisconsin, the fifth-termer who is the House Budget Committee's new ranking Republican, has proposed an alternative resolution. It not only retains Bush tax cuts but also proposes deep reductions in spending, protects Social Security payments and runs down the national debt.
Why was no such resolution advanced during the 12 years the GOP was in the majority? Would the party's leadership support the Ryan resolution if it were in control now? That those questions must be asked undermines Republican credibility and explains why Democrats dare return to tax, spend and elect.