Congress is finally getting serious about its final tax legislation before election season gets into full swing. And, reports the Washington Post, last week’s proposal for a $100 rebate is being hastily buried. The half-baked plan never got serious backing even from Republicans and more and more looks as if it was dreamt up by Senate Majority Leader Bill Frist to give his 2008 presidential ambition some insurance against charges that he was out of touch with the pain caused by $3-plus-a-gallon gasoline prices.
The consensus seems to be that there are no short-term fixes for high gas prices and the economy and the politicians will just have to ride it out since prices are being driven by that old law of supply and demand. Of course, in five to 10 years we will probably be awash in oil as prices lead to some conservation and the recovery of oil that only becomes economic when the price of crude is north of $60-a-barrel.
No policy wonk worth his ring binder of briefing notes would ever have come up with some of these prescriptions. The wonk consensus seems to be that gas prices will make consumers more realistic about the cost of transportation and give alternative fuels a chance in the marketplace. The only thing more likely to bring on solar and hydrogen cells would be mandated standards but building that kind of political consensus will take much more of a crisis than we’re facing now.
This week’s prescription to repair Republicans’ fortunes for November is an extension of the tax cuts on dividends and capital gains and small business investment, reports the Post. Hmmm. This will, no doubt, play really well with party donors and true believers, but it is hardly got any appeal to the pinched middle class facing sagging salaries and rising gas prices. This kind of tax cut, if the Senate doesn’t save the party from itself, will only increase the deficit and certainly won’t boost Republicans’ election chances.
And buried in the details of the $70 billion tax package is a measure to ameliorate the alternative minimum tax for one more year. The tax is threatening ever greater numbers of middle class voters, particularly those in the suburbs with big mortgages and deductions for dependent children. If you want win elections, you’ve got to go where the voters are.
