Now, prudence may be in short supply in the nation's capital. Indeed, Congress and the incoming White House might be preparing for a tax-cut bidding war. I have no doubt about it at all. That price tag assumed the package wouldn't take effect until 2002, making the first-year cost zero. Bush advisers say a tax cut will prevent the economy from sliding into recession.
Many economists disagree.
Congress takes too long to enact tax cuts, they say, and by the time the cuts take effect, the economic emergency that prompted them has likely passed. Instead, the Federal Reserve, which can act quickly and unilaterally, must be depended upon to buffer the economy from shocks by lowering interest rates. Even so, Bush advisers say they can change the tax plan to make it a more effective economic stimulator. That would raise the total cost of the package significantly, but other provisions that would have no economic impact could be broken out into separate legislation. Knowledgeable Republican congressional aides pointed to Bush's plan to eliminate the estate tax as a prime target.