Kent Conrad's big lie
In "F*** you: The inside story," on Senator McCain's close encounter with Senator John Cornyn on the proposed immigration bill, I referred in passing to "the Democrats' $2.9 trillion budget plan, an outline for the largest tax increase in U.S. history." When the Washington Examiner subsequently quoted our report on the McCain-Cornyn encounter, North Dakota Senator Kent Conrad responded with a letter to the editor of the Examiner published on May 24:
Scott Johnson slipped false partisan rhetoric into his story when he off-handedly characterized the just-passed congressional budget as paving the way for a big tax increase. He is just plain wrong. Our budget does not include — or require — a tax increase.By the time of his letter to the editor, Robert Novak had already definitively exposed Senator Conrad's duplicity in his May 21 column "Lying about taxes." An earlier column of Novak's had elicited the same response from Conrad that we drew. As Novak reported:The budget extends middle-class tax relief and provides a one-year fix for the Alternative Minimum Tax. And it allows for new tax relief and the extension of other expiring provisions, as long as they are paid for.
In fact, over the five years of the budget, revenues total $14.828 trillion, which is virtually identical to the president’s level of $14.826 trillion, as estimated by his own administration. Revenues are only 2.1 percent above the president’s level, as estimated by the Congressional Budget Office.
The modest additional revenues in the budget are not a result of any assumption regarding the expiration of upper-income tax cuts. Instead, we believe the difference in revenue can be achieved by closing the tax gap, shutting down abusive tax shelters and addressing offshore tax havens — without raising taxes.
According to the IRS, the annual tax gap — the amount of taxes owed under current law, but not paid — was $345 billion in 2001. And the gap has likely grown much larger since then. At the same time, the Treasury is losing $100 billion each year to abusive tax shelters and offshore tax havens. Recovering just a small percentage of this lost revenue could fund the nation’s priorities, while lowering the tax burden on the vast majority of honest taxpayers who pay what they owe.
The good news is that the just-adopted budget can be implemented without raising taxes on anyone.
Sen. Kent Conrad, D-N.D.
Chairman,U.S. Senate Budget Committee
Conrad has repeatedly insisted his budget contains no higher taxes. But how, then, can it increase discretionary spending $200 billion over five years, while promising immense budget surpluses in the future? By raising taxes not only on upper-bracket income earners but also on dividends and capital gains, affecting many more Americans.Novak explained: "Under the Democratic budget, the Bush administration's tax cuts are permitted to expire at the end of 2010. That means higher taxes if Congress does nothing."Conrad has been in denial. After I described his budget as an old-fashioned Democratic tax-and-spend formula on March 28, Conrad wrote a letter to newspapers accusing me of "blind ideology and meaningless partisan rhetoric." His budget, he said, "neither assumes nor requires a tax increase." That is exactly what he has been saying for months on the Senate floor.
Conrad's game is indirectly exposed in the "host of tax relief" in the 2008 budget touted by Senator Max Baucus. Baucus's budget amendment preserves specified tax cuts that would otherwise expire under the budget bill. The basic Bush income tax and capital gains cuts that Baucus doesn't specify are the ones whose expiration will result in broad tax increases under the budget bill passed by Congress.
Senator Conrad is an unusual Washington politician. After he narrowly defeated incumbent Mark Andrews in 1986, he fulfilled a campaign promise by declining to run for re-election if the budget deficit had not been reduced by the end of his first term. Instead he stood for election to the open Senate seat created by the death of Quentin Burdick. It is Burdick's seat that Conrad holds today. In his relentless promulgation of the big lie regarding the Democrats' tax-raising budget, however, I believe that Conrad is -- as Robert Novak has demonstrated -- just another Washington hack.
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