If scientists were able to determine, beyond doubt, that the sky were actually going to fall on Monday, Oct. 6, Congress would pass legislation containing tax breaks for lobster fisherman in Maine and glue manufacturers in Paducah. It's just what they do.
The Senate version of the financial bailout bill -- an emergency measure designed (we thought) to keep the world economy from tumbling into a deep recession -- has been ornamented with special favors. Glancing through this bill, you find that Puerto Rican and Virgin Islands rum makers get a tax break, as do certain commercial fisherman and others who were affected by the Exxon Valdez oil spill of 1989. Makers of wooden arrows for children's toys are remembered, along with rural schools. There's a duty suspension on wool products, and television production companies get a break on expensing rules. Mental illnesses (including substance abuse) are to receive parity with other disorders in private insurance coverage, and geothermal heat pump systems will get favorable tax treatment. An estimated 24 million middle-class households would be relieved from paying the Alternative Minimum Tax (originally aimed at millionaires). It goes on and on.
Some conservative Republicans dug their heels in on the House bailout bill -- which was, gulp, relatively clean compared with this. Now a 100-page bill has become a 450-page monstrosity tarted up with special favors for this one and that one. Did they just walk through Senate offices scooping up old bills and throwing them into the word processor? Some of these provisions may be perfectly good ideas. But isn't the Senate supposed to be the world's greatest deliberative body? Isn't it supposed to hold hearings and debate these things instead of bundling them all up in a "must pass" emergency bill?
We have seen a couple of weeks go by since Hank Paulson warned us that economic disaster was imminent. He claimed that he needed czar-like powers instantly. That was clearly not the case. On the other hand, the danger is obviously real. The credit crunch has begun to bite. Gold prices are spiking as investors look for safety. Car sales are tanking. Layoffs have begun. As Congressman Paul Ryan (R-Wis.), an economist, noted when he voted for the rescue bill, "The credit spreads are going crazy. It's like nothing I've ever seen in my life."
The stakes are high.