The presidential election is finally over and George W. Bush is about to be sworn into office.
The Congress is narrowly divided between Democrats and Republicans. In order to accomplish much of anything, bipartisan support is going to be required.
Should the new president push for his promised tax cut or is there other pressing business that needs to be addressed first? I wish Mr. Bush had not tied has campaign to the promise of a massive tax cut, but he did.
I believe that the tax cut was a defensive maneuver designed to solicit conservative support during the primaries and not the result of serious strategic planning.
It seems to me the America stands at the threshold of tackling several major policy issues that need resolution before we can know how much money will be left in the bank to fund tax cuts.
What about health care?
Are we going to guarantee universal health care as a right of being an American citizen or will the existing system continue?
The Clintons tried early in their reign to move the country to universal health care and fell flat on their faces. However, the subject seems to keep reappearing like a bad relative. More and more people seem to think that the time has come for furnishing everyone some level of basic health care.
Universal health care is an emotionally-charged issue that causes blood pressure to rise on both sides. Supporters say that we have reached a point where providing everyone with health care is required for our society to progress to the next level. We already provide everyone a modicum of retirement income to prevent destitution. Providing minimal health care to all is the logical next step.
Opponents say that universal health care is too expensive and the health care delivery system would be corrupted beyond imagination.
Citing Medicare, Medicaid and the government-controlled health care system in Canada as examples of boondoggles, they want to keep health care in the private sector and thereby keep government out.
A somewhat less volatile issue seems to be federal government assistance with senior citizens’ prescription drug costs. During the presidential election campaign, both candidates espoused their versions of how this program should be implemented. It seems that federal funding is a foregone conclusion, all that remains is working out the details.
Social Security, Medicare
and the national debt
Add to these health-related issues the future problems of Social Security and Medicare deficits and it appears that we are facing some huge expenditures. And then there is the matter of the national debt.
Finally, the Balanced Budget Act made serious cuts in hospital funding. Many, if not most, hospitals have been forced to curtail services. A number of smaller hospitals have closed their doors permanently. Is there need to revisit the impact of the Balanced Budget Act before we give away the store in a massive tax cut?
I am concerned that all the talk of tax cuts and huge new spending programs are being tossed about while the money is not in the bank. President Clinton and both presidential candidates are guilty of verbally spending money that is not on hand and will only be realized over the next decade if, and only if, economic forecasts are extremely accurate. I don’t spend my money that way and would prefer the government would adopt my conservative financial philosophy about spending what you don’t have — just say no!
It seems logical to me that resolving spending programs must occur before the “surplus” is gobbled-up by tax cuts. Otherwise, there won’t be anything left to fund whatever programs are ultimately decided upon or to reduce the national debt.
One possible answer
Here is the Jones solution for what to do with the money we don’t have but may get:
Number one, calculate what is going to be required to fund the anticipated deficits in Social Security and Medicare and set that money aside. The funds required to cure this problem can be accurately determined, and they should be set aside and held in trust until needed.
Number two, develop a reasonable repayment schedule for our national debt and build that amount into every budget. Having done that, our known financial debacles are funded, and we don’t need to concern ourselves with them anymore.
Number three, decide what involvement, if any, the federal government is going to have in funding health care. Once and for all, decide whether minimal health care is a right of American citizenship or not.
Once and for all, decide how, and if, the federal government is going to fund prescription drugs for seniors.
Whatever the decisions, assign a price tag and build it into the budget.
Number four, refund the balance of the surplus, if it materializes, to the taxpayers in the form of across-the-board tax cuts. Cuts should not be implemented until the cash is in the bank.
There you have it. A sensible program for getting our national priorities in order. Pushing forward with a tax cut before addressing the other issues would be a mistake.
Once the other issues are resolved, I will look forward to my share of the tax cut.
Thought for the Moment
We are not here to glorify ourselves, but to glorify the One who made us all and who eventually will judge each of us on how well we did at the end of the journey we all take but once.
— Oliver North, former National Security
Council aide to President Ronald Reagan
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at firstname.lastname@example.org.