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Remember When: Congress Passes $1.4 Trillion Economic Package

February 6, 2009

As President Obama finally starts to fight for his economic stimulus bill, roadblock Republicans in the Senate continue to decry the price tag. While John Thune (R-SD) described how many times $1 trillion worth of $100 bills would circle the earth, Minority Leader Mitch McConnell (R-KY) proclaimed "Americans can't afford a trillion-dollar mistake." Of course, back in 2001, the GOP had no qualms (along with some invertebrate Democrats) in passing George W. Bush's much larger $1.4 trillion tax cut package. And as today's unending sea of red ink and unprecedented upward redistribution of wealth attest, the Republican Party is simply calling for more of the same.
Unlike the 7.6% unemployment rate and $1.2 trillion deficit Barack Obama inherited, George W. Bush arrived at the White House with a federal budget surplus and joblessness at 4.2% - and no mandate. But as every sentient being outside of the mainstream media will recall, Bush promised to slash taxes for the wealthiest Americans, including an end to the estate tax (lovingly rebranded by GOP spinmeisters as the "death tax."). And despite his loss of the popular vote to Al Gore and facing a 50-50 Senate, President Bush and his team made clear there would be no search for common ground with Democrats in pursuit of the 10-year, $1.6 trillion package. As Vice President Dick Cheney put it on December 17, 2000:

"As President-elect Bush has made very clear, he ran on a particular platform that was very carefully developed. It's his program, it's his agenda, and we have no intention at all of backing off of it. It's why we got elected.
So we're going to aggressively pursue tax changes, tax reform, tax cuts, because it's important to do so. [...] The suggestion that somehow, because this was a close election, we should fundamentally change our beliefs, I just think is silly."

For his part, Bush presented the tax cuts as the cure for whatever might ail the economy, both a tasty dessert topping and a floor polish. Later proclaiming the tax cuts "vital" for economic growth, at first President Bush announced they were essential for emptying the flush treasury (and not a recession) he had inherited from Bill Clinton:

"'The surplus is not the government's money. The surplus is the people's money. And I'm here to ask you to join me in making that case to any federal official you can find."

And listen they did. In Congress, the Republican leadership insisted the Bush tax cut package proceed as designed, a point echoed by the White House. As the New York Times recounted on January 23, 2001:

Mr. Bush discussed tax cuts today in his meeting at the White House with Speaker J. Dennis Hastert of Illinois and Senator Trent Lott of Mississippi, the Senate's Republican leader. Afterward, Mr. Hastert said he and Mr. Lott would work to complete something very close to Mr. Bush's plan as fast as possible.
''We're going to work with the president to get it through both the House and the Senate the best we can and try to keep to the president's principles and parameters,'' Mr. Hastert said.
Mr. Bush's spokesman, Ari Fleischer, said the president would ''fight for the package that he ran on.''

Which is exactly what happened that spring. With only minor changes (the tax cuts were not permanent, the estate tax was lowered and not eliminated), the 2001 Bush tax cuts passed both houses of Congress with substantial numbers of Democrats voting in favor. While the House backed the original $1.6 trillion, the Senate (where Bush faced the opposition of John McCain and soon-be-ex Republican Jim Jeffords) initially voted for "only" a $1.2 trillion. Ultimately, the compromise conference bill came in $1.35 trillion and brought numerous Democrats along for the ride:

The bill passed the House by a vote of 240 to 154, with 28 Democrats and an independent joining all Republicans in voting yes. The Senate then passed it by a vote of 58 to 33.
Twelve Democrats joined 46 Republicans in support of the bill in the Senate. Two Republicans - John McCain of Arizona and Lincoln Chafee of Rhode Island - voted against it on a day when some members of Congress had already left town for the holiday weekend.

The rest, as they say, is history. Along with the second round of tax cuts passed in 2003, the Bush program as predicted eviscerated the Clinton-era budget surpluses as well as the $5.6 trillion surplus forecast by the CBO by the end of the decade. An analysis by the Center on Budget and Policy Priorities (CBPP) in 2006 estimated that the Bush tax cuts were responsible for 51% of the mushrooming federal deficit. (Making them permanent, the Center for American Progress concluded last year, would blow another $2 trillion hole in the budget over 10 years.) And as critics warned, President Bush handed a massive windfall to the wealthiest Americans who needed it least. That result, as software makers are fond of saying, was a feature and not a bug: as was reported last week, the income share of the richest 400 Americans doubled over the past decade.
As for his party's wavering in opposing the dangerous and irresponsible Bush tax cuts, Democratic Senator Max Baucus (D-MT) had this to say after the June 8, 2001 signing ceremony at the White House:

"Every day it looks like a better and better decision. In many respects, I think politically I helped the party. We Democrats would have been in trouble in 2002 just saying no to every one of the president's proposals.''

The lesson for Barack Obama, the right-wing amen corner and the mainstream media alike seem to agree, is this. Bipartisanship is not reaching out to the other side - pleas for post-partisanship, larding the bill with business tax provisions he opposed, meeting three times with GOP leaders and a rare presidential trip to Capitol Hill. Being bipartisan, as George W. Bush taught, is to marshal absolute party unity, proceed with your bill essentially unaltered and bring just enough turncoat Democrats along for the ride.
Alas, as President Obama is now learning the hard way, it apparently only works for Republicans.
UPDATE 1: MSNBC and ABC are now reporting a tentative deal has been reached in the Senate on a $780 billion compromise stimulus package.
UPDATE 2: ThinkProgress chimes in, noting "supporters of $1.3 trillion Bush tax cuts In 2001 now call $900 billion recovery plan 'too much.'"
(This piece also appears at Crooks and Liars.)


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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