Commentary

Sen. Daschle Knows What Every American Needs

Senator Majority Leader Tom Daschle’s recent economic speech did not provide the clear-cut political battle plan he had hoped for. In fact, it highlighted the economic muddle that entraps many on Capitol Hill.

Just look at the speech’s endless contradictions. Daschle said the Bush tax cut was too big, but then argued for more tax cuts himself. He claimed the budget has had the most dramatic fiscal deterioration in history, but then called for more spending. He blamed tax cuts for high interest rates, even though short- and long-term rates are low. He called for expanded trade, but also called for increasing energy independence.

Sen. Daschle warned that Congress may “raid” and “threaten” Social Security and Medicare reserves. If Congress goes back to deficit spending, Daschle alerted us that these programs will be “a fiscal time bomb.” But then the senator said these programs “may be the most successful government programs in history” that “guarantee” retirement with dignity.” To clarify then, the program provides a successful guarantee, but only until its raided and the time bomb goes off.

The senator’s speech also made clear his outdated big government approach to the economy. He called for a “comprehensive plan” to win the “economic battle,” argued that the government was behind high-tech progress, and demanded that we “fully fund” boondoggles like the Advanced Technology Program. Such sentiments were popular during the last recession. In the early 1990s, policy wonks supported creating a Japanese-style MITI planning agency, and experts identified “interactive TV” as the next big thing. But the 1990s boom proved that diverse experiments by freewheeling entrepreneurs are the key to high-tech success, not central planning by Washington.

Daschle’s outdated views are also clear the way he equates the government with the whole of society. He doesn’t seem to recognize that the size of the federal budget and the size of private pocketbooks are inversely related. For example, he says the Bush tax cut “put us in an unnecessary fiscal bind” that will “shortchange critical needs.” But what about the fiscal bind of families and businesses during a recession? A big tax cut does respond to their critical need to keep more of their own money.

Besides, what kind of fiscal bind is the government in when federal spending will jump at least $122 billion, nearly seven percent, in fiscal 2002? Compare that to the fiscal situation of the private sector. Based on three quarters of data, corporate profits will be down about $140 billion in calendar 2001. Clearly, it’s the private sector in a fiscal bind right now, not the ever-expanding federal government.

Daschle talked a lot about need. “Our nation has urgent needs on all fronts,” and he wasn’t just talking about national security. He said we “need to … renew our commitment to training and lifelong learning.” I think Daschle’s government is too needy to do things that Americans can do for themselves.

Daschle prioritized needs for us with 16 separate “we should” commands. As in “we should double civilian R&D funding” and “we should invest in education, training, and technology to promote job creation and economic growth.” When he says “we” he is really talking about transfers from you. So the logic here goes like this: “We should remove $500 from the Smith family, who had planned to pay for plumbing repairs, and give it to the Jones family to take a subsidized computer course.” Apparently, Daschle has done the math and concluded that the addition to the Jones’ happiness is greater than the subtraction from the Smiths’ happiness.

Some of Daschle’s other “we shoulds” included “we should expand assistance to all workers who are hurt by global production shifts” and “we should help these workers learn the new skills they need to earn a living.” It would seem odd that Americans left to their own devices would not learn new skills, especially if their livelihood depended on it. If education is an “essential investment” as the senator says, wouldn’t families fund it by themselves?

Of course, Sen. Daschle isn’t the only politician who talks about “need” and tells us what “we should” do with our money. Taxpayers have to be wary of such talk.

Chris Edwards is director of fiscal policy studies at the Cato Institute.