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Saturday, January 06, 2007

Promises, Easy To Make

The newly minted Congress is finding right off the bat that all of those campaign promises they made are harder to keep than they figured.

It starts with what seemed the easiest thing to get, the minimum wage increase. Evidently there aren't enough democrats on board with it to get it through, so now they are looking at a tax cut for small business to lure GOP votes to pass it.

The problem is they also passed a (watered down) Pay Go rule for new tax cuts, so they have to find spending cuts to pay for the tax cut to get the minimum wage increase through.

The Pay Go rule, which was touted by many is turning into a headache for all in the House. They've promised to cut student loan interest rates by half, but now won't be able to do it at once, instead phasing it in over five years. They promised to eliminate, or at least soften the alternative minimum tax (ATM), but have to find at least 50 billion a year in cuts or new taxes soften the ATM, or 100 billion a year to eliminate it.

Paul Ryan of Wisconsin mocked the new congress, saying they've put the American people on a collision course with a tax increase. He is right, and the Democrats know it, but don't know how to deal with their own rules, and their own campaign promises.

I predicted a few months ago, before the election, that whoever had control of congress for the next two years would have issues with the economy going into the 2008 elections, because economies are cyclic. The Democrats, in 48 hours, have started brewing a perfect batch of "get un-elected" beer for 2008. A slight downturn in the economy, with tax increases included, will be used as fodder to show why their programs don't work to keep America moving.

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