The Tax Flip-Flop: Why Bush Did It
SENDING forces to the Persian Gulf and shifting his position on taxes were, arguably, the biggest decisions President Bush made since taking office. The first he made relatively easily. The second he agonized over. Mr. Bush was, and is, convinced that raising taxes is the wrong remedy for the ailing economy. Further, he believes that the needed deficit reductions could be achieved by cutting government spending.
But finally he became persuaded - after months of wrangling with the Democrats in Congress - that the only way a budget package could be produced would be if he ate his ``read-my-lips'' words and opened the door to taxes.
When he did it, he put the best face on it he could. He said that ``new circumstances'' caused his reassessment. But in conversations with his advisers he fumed. He knew he would take a big hit politically for this radical change in course. More than that, his anti-tax position was a matter of principle with the president. Despite earlier doubts, he had become a true believer in this economic doctrine while serving under Ronald Reagan.
Bush held his no-tax ground for many months before relenting. While the Democrats in Congress carefully avoided getting out in front on raising taxes, it became abundantly clear they would agree to no budget package that didn't include reliance on this approach.
So as the day of reckoning neared - with the automatic, massive cuts mandated by the Gramm-Rudman deficit-reduction act on the horizon - the president had to decide whether sticking to his guns and scorning a deal with the Democrats would be better than going the taxation route. He seriously considered doing this. But in the end he concluded that the turmoil that would ensue would be intolerable. Further, he simply could not accept some of the big cuts to programs he, himself, favored - particularly defense.
There was something else: With the country either on the edge of or already entering a recession, the government's procrastination in dealing responsibly with its budget was eroding public confidence and hurting the economy.