SYNOPSIS: Republicans in Congress have a new tax-cut strategy: economic torture
Does life imitate art, or what? Last weekend's box office was dominated by a movie in which Denzel Washington takes an emergency room hostage to secure treatment for his dying son. Last week's major political event, though it went largely unnoticed by the general public, was also a hostage drama: House Republicans blocked vital aid to the nation's most vulnerable workers, and have refused to release it unless they secure passage of a dying stimulus plan. The plan, you won't be surprised to learn, consists almost entirely of tax cuts for corporations and the wealthy.
Here's how the blackmail scheme works. U.S. unemployment insurance, unlike benefits in many other advanced countries, has a sharp cutoff: 26 weeks and you're out. This cutoff can be rationalized as tough love; arguably the American system, by giving workers no choice other than to find new jobs, has helped prevent the emergence of a European-style class of permanent unemployed. But it's a very harsh rule to impose during recessions, when new jobs are simply not available.
And that's the current situation. Last week 80,000 workers reached the end of their benefits; the Center on Budget and Policy Priorities estimates that two million workers will have exhausted their insurance by June.
Fortunately, in practice the rule is relaxed in hard times. When recession strikes, Congress invariably acts to extend unemployment benefits. During last fall's stimulus debate, everyone favored a 13-week extension. True, both sides tried to tie that extension to other measures. But everyone expected that in the end Congress would extend benefits whatever the status of other stimulus proposals. Indeed, the Senate passed an extension by unanimous voice vote.
But the hard men of the House leadership refuse to allow a clean vote on unemployment benefits. Instead they continue to insist that it's their way or no way: they won't allow a vote on benefits extension except as part of a bill that mainly consists of tax cuts for corporations and families in upper tax brackets, pretty much identical to the failed stimulus bills of the fall. And they rammed that bill through last Thursday.
Let's leave aside, for a moment, the economic merits of those tax cuts. What's really striking about this tactic is its sheer bloody-mindedness: the House leadership is willing to impose pain on some of the most vulnerable people in the country, desperate families whose breadwinners have been unable to find jobs, in order to push a divisive, partisan agenda.
And for what it's worth, that agenda is also bad economics. Last month the nonpartisan Congressional Budget Office reviewed a range of potential stimulus measures, including all the elements in the latest House bill. Sure enough, the bill consists largely of the very measures — accelerated tax cuts for upper brackets, reductions in the alternative minimum tax on corporations — that the C.B.O. concluded would be least effective.
What these proposed tax cuts have in common, of course, is that they deliver not a penny of relief to the great majority of American families.
But isn't the House leadership's behavior just politics as usual? No, it isn't. Politics as usual is trying to attach goodies for yourself to bills that provide goodies to other people. Everyone does that. But extending unemployment insurance in a recession is so standard — and refusing to do so is so cruel — that the House action takes the tax-cut crusade to a whole new level of fanaticism.
Put it this way: At first, ordinary workers were told that they would benefit directly from lower taxes — remember those "tax families"? Great effort was devoted to obscuring the simple truth that last year's tax cut offered crumbs for ordinary families, but huge breaks for the wealthy.
Then ordinary workers were told that they should support bills like the two House stimulus plans from the fall — bills that offered retroactive tax cuts to corporations, big tax breaks to families with high incomes, and nothing at all to two-thirds of the population — because those bills would create jobs. After all, tax cuts are part of the war on terrorism, or something.
But now tax-cut advocates have moved from promises to threats. Support tax cuts for the elite, the House leadership says, or we'll cut off your unemployment benefits.
So what's next? Support tax cuts or we'll break your legs?
Originally published in The New York Times, 2.19.02