Waiting for a war tax

Tom Curry National affairs writer • Profile • E-mail

WASHINGTON - If there’s an air of unreality about the debate in Congress over the cost of the Iraq war, there are two reasons for that.

First, since President Bush will not sign a tax increase into law, members of Congress in both parties must wait for the next president to propose tax increases in 2009 to help pay for the war.

Second, the current income tax rates don’t expire until 2011, thus no retooling of those rates is going to be enacted much sooner than that.

In a briefing for reporters Tuesday on a new estimate by the Joint Economic Committee on the costs of the wars in Iraq and Afghanistan ($3.5 trillion between 2003 and 2017), Democratic leaders did not once mention a tax increase.

They did decry the diversion of revenues to Iraq and Afghanistan that they’d prefer to have been used in the United States.

House Majority Leader Steny Hoyer accused Bush of saying, in effect, “there’s too much being spent on American students, on American children for their health care, on communities for the investments in infrastructure, but we are sending $200 billion extra to Baghdad and Kabul.”

Video   'Hidden' cost of war Nov. 13: How much will taxpayers be spending for the wars in Afghanistan and Iraq? MSNBC's Mike Viqueira reports on a Democratic estimate released Tuesday. MSNBC

Bush on Tuesday vetoed the $150.7 billion Labor-HHS-Education spending bill, because it would have spent $10 billion more than what he’d proposed.

Borrowing from China, Saudi Arabia
At their Tuesday “war costs” event, Democratic leaders also lamented the costs to the taxpayers of borrowing hundreds of billions of dollars to pay for operations in Iraq and Afghanistan.

“We are borrowing money from Saudi Arabia, China, Japan, Mexico,” said Senate Majority Leader Harry Reid.

“Had the administration paid for the war instead of borrowing, these (interest) costs would have been significantly lower,” said Joint Economic Committee chairman Sen. Charles Schumer.

But “paid for” how exactly?

Schumer emphatically did not want to discuss tax increases. Asked whether it would make more economic sense to raise taxes to pay for Iraq and Afghanistan operations rather than to borrow money, Schumer quickly said, “Well, I don’t know about tax increases.”

Some less senior Democratic senators were willing to talk Tuesday about tax hikes.

Sen. Amy Klobuchar, D-Minn., said, “I think we have some messed-up priorities and I think we need to change the way we’re entering into tax reform. I think the answer is to roll back the Bush tax cuts on the wealthiest, the people making over $200,000 a year.”

She said she also favored closing some tax loopholes, including benefits for oil companies.

She also said that withdrawing U.S. troops from Iraq would reduce the fiscal burden of the war.

But Democrats still tend to look back to what they see as Bush’s mistakes of the past more than they look forward to actions the new president will take in 2009.

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