WASHINGTON —
The Concord Coalition said today that it
would be premature to permanently extend the estate tax repeal or any other
provision of last year’s tax legislation before a broader fiscal policy
agreement is reached between Congress and the Bush administration.
WASHINGTON —
The Concord Coalition said today that it
would be premature to permanently extend the estate tax repeal or any other
provision of last year’s tax legislation before a broader fiscal policy
agreement is reached between Congress and the Bush administration.
“Last year’s tax bill was approved on the
assumptions that the nation would not be at war, that the Social Security
surplus could still be set aside, and that even with a $1.3 trillion tax cut the
public debt would be virtually eliminated by the end of the decade — before the
Baby Boomers’ retirement and health care benefits become a major drain on the
budget. All of those assumptions were wrong. A logical response to such
dramatically changed circumstances would be to reassess whether the entire tax
cut plan should be phased in over the next several years as scheduled,” said
Robert Bixby, Executive Director of The Concord Coalition.
Concord noted that even a fiscally prudent
response to the new security environment will result in substantially higher
spending than was anticipated last year. The President’s budget appropriately
states, “Achieving our homeland security objectives will require vast sums of
money, strenuous labor and many years.” Defense and homeland security proposals
have already added about $650 billion of new expenses to the President’s budget
over the next 10 years and more could result from the proposal to create a new
Department of Homeland Security.
“The proponents of removing the tax cut sunset
are correct that the absurd results of this provision must be dealt with at some
point. But the sunset provision serves a very useful purpose — it is the
ultimate ‘trigger.’ As events unfold over the next year or two, and we see
whether deficits are as short term and modest as the President hopes, it may
make sense to adjust the phase-in of tax cuts accordingly — perhaps extending
some of them permanently while limiting or delaying the effect of others. With
deficits back, the Boomers scheduled to begin receiving entitlement benefits in
just six years and the upper level of future spending on national security still
very uncertain, what is needed more than extended tax cuts is a new long-term
fiscal policy plan. In the absence of any such plan it is likely that Congress
and the President will continue spending the Social Security surplus and running
up the debt. Removing the tax cut sunset should only be done after much more
difficult decisions have been made,” said Bixby.
The Concord Coalition is a nonpartisan, grass
roots organization dedicated to balanced federal budgets and generationally
responsible fiscal policy. Former U.S. Senators Warren Rudman (R-NH) and Bob
Kerrey (D-NE) serve as Concord’s co-chairs and former Secretary of Commerce
Peter Peterson serves as president.
