They’re Binging, and You’re Buying.

Ryan Walsh

In early July, supply-side economists found occasion to raise their glasses in honor of the great Art Laffer, whose theories on tax cuts had once again been vindicated.

This year’s federal budget deficit, the Congressional Budget Office (CBO) announced on July 8, should be “significantly less than $350 billion, perhaps below $325 billion,” marking an almost $100 billion drop from last year. According to Treasury Department statements, most of this new revenue has resulted from an explosive growth in dividend payments, capital gains, and corporate income. As it happens, an ambitious reduction of the dividend and capital gains tax rates and a generous allowance for more business depreciation write-offs were among the highlights of the Bush tax cut of 2003.

Art Laffer and his gang of supply-siders demonstrated that tax cuts, by laying the framework for economic growth, resulted in more tax revenue in the Harding and Coolidge administrations of the 20s, the Kennedy administration of the 60s, and the Reagan administration in the 80s. They can now chalk up the Bush tax cut of 2003 as yet another vindication.

Meanwhile, like a heroine addict stumbling upon a $100 bill on the sidewalk, Congress reacted to the upbeat fiscal news with unmitigated glee. The big spenders on the Hill shrewdly calculated that they could easily binge on a large portion of this new revenue and still boast to the voters back home about bringing down the deficit.

Thus, Congress passed last week two of the most bloated, wasteful, and pork-laden spending bills of the year: the energy bill and the highway bill.

The Bush people had touted the energy bill, which had languished in Congress for months without a vote, as evidence the administration was “doing something” about high gas prices. This worked to the President’s advantage. Whenever pressed on the issue of gas prices, Bush would respond, “Congress needs to pass my energy bill.” Now that it has passed, some in Congress are beginning to see the bill for what it is: a $66 billion energy-industry grab-bag of tax exemptions, credits, and misallocated subsidies.

The bill throws taxpayer dollars at new, trendy energy resources that free-market investors won’t even touch. Over $500 million for forest-biomass fuels? Hardly the wave of the future, one would think. New tax credits for non-commercial solar panels? Carter incorporated similar solar-panel tax credits in his energy policy, and they failed. Or how about a new provision that requires the U.S. to add 7.5 billion gallons of ethanol to our fuel supply? It makes corn growers happy, but gas more expensive. Also, no one knows for certain if producing ethanol uses more energy than it supposedly later conserves.

The highway bill, with a price tag that reads “$286.5 billion,” is decidedly worse. It is, in fact, the costliest piece of public works legislation in U.S. history. It doles out a record-setting $24 million in pork-barrel spending. With 6,376 different pet projects listed, almost every congressional district in the country gets a piece of the action.

You’ve got to hand it to Congressman Don Young from Alaska: he certainly knows how to spoil his constituents. He scored an amazing $1 billion from the highway bill’s pork-money slush fund. Among other things, the money will be used to fund a new documentary “about infrastructure that demonstrates advancements in Alaska, the last frontier” and to create a new bridge in Anchorage. Oh, and the name of the bridge? (Cue trumpet fanfare.) “Don Young’s Way,” the bill declares.

Our fiscal future is bleak. Social Security is nearing either bankruptcy or reform, and both are expensive. The CBO reported last Thursday that Medicare costs are growing more rapidly than they have in a decade, and that’s not even factoring in the new prescription drug benefit.

A seismic fiscal shock is drawing near, and congressional Republicans and Democrats alike refuse to notice. Instead, they roam the streets of Washington like whacked-out cokeheads, looking frantically for that extra tax money with which they can feed their ravenous addiction.

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Ryan Walsh is 17 and a Senior at Webster High School in Webster, Wisconsin. He contributes a column to his local county paper,The Burnett County Sentinel, and to several websites including OpEds.com, www.therightreport.com, and www.americandaily.com. His columns have warranted the attention of conservative luminaries such as former Attorney General Ed Meese and Heritage Foundation fellow Brien Riedl, who once called Ryan's writing, "good work....a much better column than many I read in newspapers today."

ryanwalsh12@hotmail.com