Silence's Party Switch

Frequent commenter and token, house-boy-liberal, Silence Dogood, has offered to join the dreaded Republicans if they were to make a fulsome pitch for consumption based taxation. WSJ Ed Page Economist Susan Lee handicaps the switch in today's Opinion Journal Political Diary:

Okay, so maybe it hasn't been the most energetic debate, but there is a low-key disagreement among Bushies about whether to offer Big, Bold Ideas at the convention.

The camp favoring a small, incremental approach is led by Karl Rove and others focused on poll numbers and a tight race. The BBI camp consists mostly of outside advisors and some lower-level White House staffers. Possible BBI ideas include a giant tax break for health insurance, a sweeping reform of the income tax system and privatization of Social Security.

The problem with giant changes in both health care and Social Security is an immediate hit to federal tax revenues -- undermining Mr. Bush's promise to slice the budget deficit in half over the next five years. And then there's a certain, um, wussiness in the Bush economic team.

Budget czar Josh Bolten doesn't want to blow a hole in his deficit calculations. Ditto for Treasury chief John Snow, who also is busy trying to cheer up the labor markets to create some employment growth (one fear: with a major reform in the offing, businesses and investors might stop in their tracks and play wait-and see). The head of the Council of Economic Advisers, Greg Mankiw, has been sidelined over his politically incorrect defense of outsourcing. Meanwhile, Steve Friedman, director of the White House's National Economic Council, is mostly silent as a tomb.

That leaves the idea of a major tax reform. But the economic team is ineffective here too because of differences over what type of reform to push -- a flat tax or some sort of national sales tax. At the moment, the BBI lobby seems to be losing the debate. But don't count them out. As the convention gets closer, expect to see their attack get more determined and less polite.

We're all keeping an anxious eye on this one! (NED bless you, Silence, you're good to put up with all this abuse.)

Posted by jk at August 16, 2004 11:08 AM