WASHINGTON -- The news business here has gotten a little distracted by marginal stories lately, while overlooking policy developments that will have a much bigger impact on the lives of ordinary Americans.
A case in point: the brouhaha over Vice President Dick Cheney's accidental shooting of a hunting partner that led news shows for several days, partly fueled by the needless delay in getting the story out to the public. Sure, such a rare event is obviously newsworthy, but the near-hyperbolic reaction to it seemed out of proportion. As Cheney's hunting buddy said upon leaving the hospital, "Accidents happen."
End of story.
Compare the all-out response to that episode to a barely noticed event occurring about that time in Congress: the Senate's embrace of several Bush tax cuts that are now being fine-tuned by a House-Senate conference committee.
Some might see this story as congressional business as usual, the vicissitudes of political jockeying over bills slowly moving through the legislative meat grinder. Seen in its fuller context, however, this is all about the changing tax debate in this country and about how President Bush's tax cuts are overcoming Democratic opposition to their extension.
This is also about how Bush, little by little, is moving parts of his agenda on Capital Hill during a time when most analysts say he's not going to get much done in his second term. Oh, really? Cutting taxes is the pivotal issue in Bush's domestic agenda. Tax cuts were opposed by most Democrats and passed by only a narrow margin in 2001 and in 2003 when they were accelerated. Senate Democrats condemned the cuts -- and vowed to prevent their extension.
If Democrats were fiercely against Bush's across-the-board tax cuts, they are even more intensely opposed to capital gains and dividend tax cuts for people they see as rich investors who hardly need incentives to get richer. Never mind that more than half of all workers in this country own stocks, and millions of them are middle- to lower-income earners.
But last week, the Senate voted, 53-47, to solemnly instruct the House-Senate conferees to include extension of Bush's capital gains and stock dividend tax cuts, and alternative minimum tax relief, in the final conference report that will be sent to both chambers for final action. In other words, the Senate -- the graveyard for much of the president's agenda -- was telling conferees that when they bring back the finished bill for a final vote, lower tax rates for stockholders should be embraced.
Where was the thunderous opposition to Bush's tax cuts for the rich?
The Democrats' anti-investor, class-envy rhetoric was overcome by a clear majority that believes these tax cuts will continue to fuel stronger investment in the nation's economy, creating jobs, boosting incomes and enriching worker-retirement portfolios (now totaling more than $13 trillion).
And stockholders receive more than just tax breaks in the Tax Relief Extension Reconciliation Act of 2005. It also contains:
- -- The Saver's Credit: a tax credit to encourage lower-income workers to contribute to their employer-provided retirement savings plans, IRAs or other savings accounts. This credit will expire at the end of this year, but this bill would extend it through 2009. Nearly 6 million taxpayers receive this tax benefit.
- -- Small Business Expensing: Most new jobs in America are created by small businesses, and their growth depends on the ability to reinvest in their own expansion. Right now, under Bush's tax cuts, they can deduct investments in the first year, up to $100,000 worth, but that will fall to $25,000 next year. This bill would keep expensing at present levels.
It provides other tax-cut provisions, including one that allows parents to continue to take a deduction for college-tuition costs.
But the lower tax rates for capital gains and dividends are perhaps the most important provisions of all, because they have been a driving force in the economy's expansion by unlocking capital for further investment, job creation and, eventually, deficit reduction from fatter revenue surpluses.
This is a big story by any criteria, yet it received scant attention. It certainly didn't lead the nightly news shows. They ignored it altogether.
It's too bad that so little, if any, thoughtful treatment is given to a bill like this on the nightly news. Surely, it deserves at least as much attention as a hunting accident, even one that involves the vice president of the United States.