Bad Policy in the Tax Cut Without End

NYTimes -- True, the price tag on the tax bill the House approved this morning is officially only $320 billion over 10 years, barely two-fifths of the $726 billion President Bush proposed in February.

True too, it is even smaller than the $350 billion measure initially passed by the Senate that Mr. Bush ridiculed as "little bitty."

But the $320 billion figure, which is expected to clear the Senate today, is artificial.

No one expects that tax breaks for married couples and a bigger tax credit for children, popular features of the bill, will be allowed to expire after next year. This is what lawmakers call a sunset. It was put into the measure to hold down the 10-year cost.

Nor, barring a political upheaval that puts Democrats in the White House and in control of Congress, is it likely that the lower tax rates on dividends and capital gains will be allowed to expire after 2008, another sunset in the bill.

If these elements of the tax cut are calculated on a 10-year basis, the cost in lost revenue stands to be over $800 billion, more than what the president proposed, according to the first analysis by the Center on Budget and Policy Priority, a liberal research institute.

Come the election campaign next year, the president can credit his tax cuts if the economy has improved. If the economy is still flagging, he can blame Democrats for opposing his initial proposal.

The tax bill, said Senator Robert F. Bennett, Republican of Utah, was the latest example of Mr. Bush's talent as a political strategist. Mr. Bennett, chairman of the Congressional Joint Economic Committee, continued:

"The president looks at the economy and looks at the electorate and grasps that the electorate wants to see someone doing something. They don't care about the details. So here is Bush with the political smarts to understand that the best medicine is to be seen as a leader making bold strokes, moving out on an issue where others are temporizing."