From Investor Business Daily:
Grand Old Party: Thanks to a handful of Republicans, Congress might miss a golden chance to finally get control of the budget and help secure our energy future. What in the world is going on here?
More spending, higher taxes and less oil. Does that sound like a successful recipe for a party of conservatism as it prepares for 2006's midterm elections? Yet that's what 25 "moderate" members of the GOP seem to want as they try to neuter the Deficit Reduction Act of 2005.
Spooked by "cuts" in welfare spending and plans to drill for oil in Alaska's wilderness, and no longer fearing reprisals from a distracted White House, the 25 said they won't support their own party's deficit-cutting plan. They have a lot of company; all the Democrats feel the same way.
The deficit-reduction bill, a version of which passed in the Senate, wasn't really such a big deal. Only $54 billion would be trimmed over five years — or just 0.1% of the expected growth in mandatory spending for that period. It just wasn't that much.
Despite that, the bill was important for a number of reasons.
For one, Congress for the first time in a decade was actually going to address the worst budget problem it has — runaway entitlement spending. By proposing to at least rein in the growth of Medicare, Congress could have taken a critical first step toward fiscal sanity.
It would also pull back discretionary spending that's been soaring at close to double-digit rates since 2000. This, too, would be a good thing, since total outlays have soared 40% since 2000 — 8% a year. That simply can't go on.
The bill also contained — that is, until the 25 objected to it — a provision to let the U.S. drill for oil in Alaska's National Wildlife Refuge. This would have eased our dependence on foreign oil. Now, it won't.
Twenty-four of the 25 GOP dissenters are from states facing sharp increases in home heating bills. How grateful will their constituents be when temperatures plunge this winter?
But of all the reasons for pushing this bill, tax cuts loom largest. GOP leaders sought $50 billion or so in spending cuts so that President Bush's tax cuts, which will soon expire, can be extended.
It's worth reviewing what those tax cuts have meant. When Bush entered office in 2001, the economy was in recession. Thanks to three tax cuts in a row — the last in 2003 — the economy took off.
We have now enjoyed 10 quarters in a row of 3%-plus GDP growth — the longest such string since the mid-1980s and even better than the much-ballyhooed Internet Boom of the late 1990s.
Since 2003, the economy has churned out more than 4 million jobs, while unemployment has dropped to 5%. Core inflation remains below 2%. Productivity in the third quarter soared at a 4.1% rate.
Even after 12 straight quarter-point interest-rate hikes by the Federal Reserve, the economy remains strong. Bush's tax cuts worked.
Oh, and by the way, tax cuts are also helping close the budget deficit. Thanks to tax cut-fueled economic growth, federal revenues last year jumped 14.6% from a year earlier. Even with spending growing at 7.8%, as it did last year, the budget could be balanced by 2008. Just imagine what might happen with a few judicious spending cuts.
As for energy, foolish is the only word that can describe House GOP "leaders" abandoning ANWR, where as many as 16 billion barrels of oil await. As we've noted before, if President Clinton hadn't rejected the idea in 1995, we'd now have another million barrels a day — 5% of our total use and two-thirds of what we import from Saudi Arabia. We'd also have lower gasoline prices.
And all this from a tiny, 2,000-acre tract set aside within a 19.6 million-acre forest — the equivalent of a dime on a basketball court.
That's why we thought the Deficit Reduction Act, though imperfect, deserved to be passed as it was, no changes. We still do.
On Friday, Republican leaders vowed to revive it. We wish them luck, but we're not optimistic. Even in the Senate, where a bill has already passed, Senate Finance Committee Chairman Charles Grassley is talking about extending tax cuts for only a year.
That's not good enough. What the Republicans are settling for, in their political cowardice, is little different from what the Democrats have proposed.
As we said, this is a great opportunity to make government smaller, taxes lower and energy cheaper.
To those in the GOP who oppose those things, we have a question: What do you stand for? And why should voters choose you over Democrats?
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