Cato Daily Dispatch for December 5, 2003
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Steel Tariffs Repealed2004 White House Agenda May Include Moon Voyage
Schwarzenegger Faces Budget Deadline
Steel Tariffs Repealed
According to Newsday, "President George W. Bush yesterday lifted steel import tariffs he had imposed last year, saying they had done their job to allow the beleaguered U.S. steel industry to restructure.
"The politically charged decision averted an impending trade war with the European Union, which was threatening to levy retaliatory duties on American exports after a World Trade Organization ruling last month that the steel tariffs were improper."
The repeal of the tariffs comes "better late than never," Dan Ikenson, Cato trade policy analyst, said in a statement released after the decision. "The steel tariffs certainly energized protection-seeking constituencies in the U.S. and around the world," Ikenson explained. "And the fact that the administration was deliberating about whether to even abide by the Appellate Body's ruling -- going as far as floating a compromise proposal after that body found no justification whatsoever for any tariffs -- suggests at best a sketchy U.S. commitment to its trade agreements. This is hardly a recipe for encouraging other countries to remain steadfast to their own WTO obligations.
"In the end though, the administration did the right thing," Ikenson concluded, "but there is still much more work to be done. The administration's trade leadership credentials will be tested again as we begin the 2004 election cycle."
2004 White House Agenda May Include Moon Voyage
"President Bush's aides are considering a new lunar exploration program and other unifying national goals, including a campaign to promote longevity or fight childhood illness or hunger, as they sift ideas for a fresh agenda for the final year of his term, administration officials said yesterday," The Washington Post reports.
Bush's strategists should also consider the possibility that Americans don't want another big-government program from their president. And they might just stay away from the polls next year if that's what he gives them. David Boaz, Cato's executive vice president, wrote in last week's Washington Post that "when they're given a chance to vote, Americans don't like big government. Last November 45 percent of the voters in the most liberal state in the Union, Ted Kennedy's Massachusetts, voted to abolish the state income tax.... California voters tossed out big-spending Gov. Gray Davis, and 62 percent of them voted for candidates who promised not to raise taxes to close the state's deficit.
"Bush and his aides should be worrying about the possibility that libertarians, economic conservatives and fed-up taxpayers won't be in his corner in 2004 in the same numbers as 2000.
"Republican strategists are likely to say that libertarians and economic conservatives have nowhere else to go. Many of the disappointed will indeed sigh a deep sigh and vote for Bush as a lesser evil."
But, at the end of the day, writes Boaz, "given a choice between big-government liberalism and big-government conservatism, the leave-us-alone voters might decide that voting isn't worth the trouble."
Schwarzenegger Faces Budget Deadline
"As he faces the first major test of his clout in the state capital, Gov. Arnold Schwarzenegger has run up against a dual threat: a deeply divided Legislature smarting from his hardball tactics and the determined opposition of organized labor," The Los Angeles Times reports.
"On his first day as governor, Schwarzenegger asked the Legislature to set aside partisan rancor and vote by today, the legal deadline, to place two budget measures on the March ballot."
According to Cato Adjunct Scholar Michael New, "if Schwarzenegger is looking for a better model, he should look no further than Colorado's Taxpayer Bill of Rights (TABOR). After its enactment in 1992, state spending has been kept in check. Furthermore, between 1997 and 2002, taxpayers received annual tax rebates from surplus revenues totaling over $3.2 billion".
The Taxpayer Bill of Rights is explained in more detail in a Cato Briefing Paper, "States Face Fiscal Crunch after 1990s Spending Surge".
Christopher Kilmer, editor, ckilmer@cato.org