Kennedy Calls for Slowed Implementation of Future Tax Cuts, Says Money Should Be Spent on Health Issues

Sen. Edward Kennedy (D-Mass.) on Jan. 16 proposed delaying a portion of the $1.35 trillion tax cut passed last year, saying the money should instead go towards funding "other priorities," including several health care initiatives, the Washington Post reports (Allen/Dewar, Washington Post, 1/17). Kennedy urged that $350 billion in tax cuts scheduled to take effect in 2004 be "postponed indefinitely." This delay would affect families earning more than $130,000 a year and would not impact the rest of the tax cut, he said. Speaking at the National Press Club, Kennedy said that the Sept. 11 attacks on the World Trade Center and the Pentagon produced a "new spirit" in Americans that should be "channelled" toward such measures as improving children's health care, establishing a patients' bill of rights and creating a Medicare prescription drug benefit (Shepard, Atlanta Journal Constitution, 1/17). He called on Congress to expand CHIP and to require businesses with more than 100 workers to provide employer-sponsored insurance (Fulton, CongressDaily, 1/16). "The spirit of this new time is placing major new demands on our national resources. We cannot meet them while making all of the planned future tax cuts, unless we raid Social Security and Medicare and cut health and education and other vital goals. To me, that is not only unacceptable; it is a violation of the fundamental pledges that both parties gave in the 2000 campaign," he said (Washington Post, 1/17).

The Republican Rebuttal
Kennedy's speech drew quick criticism from President Bush and other Republicans, who said that a rollback of the tax cut -- the "center" of Bush's economic policy last year -- could imperil the nation's economy, the Los Angeles Times reports. Calling a delay in the tax cut equivalent to a tax increase, Bush said, "Raising taxes in the midst of a recession is wrong economic policy. It would be a huge mistake. It's bad for American workers. It will hurt when it comes to creating jobs" (Gerstenzang, Los Angeles Times, 1/17). Noting that 12 Democratic senators supported the tax cut in May -- six of whom are up for re-election in November -- White House spokesperson Ari Fleischer said that Kennedy's proposal was unlikely to gain traction in Congress (Koszczuk, Philadelphia Inquirer, 1/17).