NO WISHFUL THINKING FROM THE REPUBLICANS
About two months ago in this space I mentioned the idea that with the upcoming election year and budget surpluses, tax cuts are certainly in our future. I said there'd probably be one this year, and there would definitely be one next year, despite all the denials from various parties. Well, here we go.
The Republicans have developed a package of tax cuts for the budget in the upcoming fiscal year. Senate majority leader Trent Lott said the package should include a further reduction in the capital gains rate. Lott, who serves on the Tax Writing Senate Finance Committee, said the current tax code is unfair and doesn't encourage economic growth. Lott also cited marriage penalty relief as an element that should be in any forthcoming tax bill, and indicated a preference for an across-the-board income tax cut as well.
Lott was asked if he thought the White House would sign a bill containing an across-the-board income tax cut, and his answer simply was, "That's their problem."
NO, Mr. Lott, it's your problem. You have a majority control of the Senate and the House, and once again, I predict the Democrats will run circles around you and your colleagues in the House, and prove again that you just don't deserve to be in power because you have no concept of how to use it. This has been the history of GOP non-leadership, if you will, ever since the marvelous apparent victory in 1994. Big plans, big promises, but except for the first year, not much in the way of accomplishments.
The Democrats continue to be the minority party in Congress, and the White House should be so weakened that it is almost insignificant. Yet in the end, the White House will get exactly what it wants, and you, Mr. Lott, and your majority, will knuckle under and wind up in some sort of a "me too" game that will be close to disgusting.
The Democrats, still promoting the cancer of class warfare, will probably not go for a capital gains tax cut, though that idea may grow as people realize how widely held investments now are. But an across-the-board tax cut at all levels doesn't have a chance. The marriage penalty tax probably will go forward, because the Democrats will see that as a populace-type issue. Meanwhile, we'll just be watching and waiting to see how the minority party in a White House unworthy of being acknowledged as a White House, outmaneuvers you this time.
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Speaking of government, the Commerce Department's Bureau of Export Administration has begun an investigation of the national security implications of rising imports of crude oil and petroleum products into our country. At the request of oil patch lawmakers, the bureau began investigation in late April and must report its finding to the Commerce Secretary no later than January of 2000. Oil imports account for about 56% of our consumption, and have been rising rapidly, due to our economic growth and a sharp drop in domestic production due to last year's decline in crude oil prices. The Energy Information Administration, the statistical wing of the Energy Department, has projected that oil demand will grow about 2.4% this year in our country, while domestic crude oil production will drop about 6.4%.
This continues a longstanding problem that we have had, and I'm not any more sure how serious it is than apparently the oil patch representatives or the Commerce Department. On the one hand, OPEC no longer has a stranglehold on international oil supplies, so their supposed leverage on us is obviously weakened. On the other hand, how healthy can it be for all that foreign oil to be imported, which forces our dependence on others? Oil importation is a major reason for our trade deficits, and beyond that, if they could ever get together (and that's a big "if"), it certainly would provide the rest of the world the potential to give us problems.
(Tom Butenhoff is a First Vice President with J. E. Liss & Company in Milwaukee. The views are his and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)