This will be the first part of my analysis of President Bush’s final State of the Union address from Monday. While the news coverage of Ted Kennedy endorsing Barack Obama for President, the Florida Primary being the following day, and by some the lack of interest in the address itself caused the local and national news programs to not discuss the material and proposals in the address, I think it is important for us to see what might be facing Congress and the nation this year and possibly in the future. With that, let us look at the first part of the address:
After the typical opening pleasantries, the President focuses first on the current state of the economy in the nation. He reassures the nation that the long-term future of our economy will be good, and we can easily look back to history and see that the long-term graph keeps rising. But for the short-term, he addresses the rising gas prices and falling home prices (rising mortgage problem) indirectly by touting the agreement he and the Democratic-controlled House of Representatives to provide an economic stimulus package to help out the middle and lower-class citizens. Many conservatives view this less as an economic stimulus and more as handouts since some people who do not file taxes are eligible for a “rebate.” Be that as it may, it will be providing aid for those that probably need it the most. Will they use these funds as it is intended and pay off their debts or decrease their economic burden? Well, that’s up for the individual citizen to answer. In the end, however, I do believe that this will provide enough aid for a large enough group that it will benefit them and provide some boost to the economy.
Continuing on the economy, the President calls once again for Congress to make the tax cuts which were passed 7 years ago permanent. If this doesn’t happen, the discounted tax rates will rise back to their original level when Bush took office. To many, this is viewed as a tax increase, even though the Democrats try to spin the language a bit (since most citizens do not want to pay more in taxes). As he stated, “Try explaining that to 116 million American taxpayers who would see their taxes rise by an average of $1,800.” Agree that it is a tax increase or not, many Americans are not looking forward to the additional tax burden, especially in a cooling economy. This is also the problem with many of the “balanced budget” plans that are passed around. In order to balance the budget during a cool economy, programs either need to be cut by Congress (which will be tough to achieve) to offset declining tax revenues and rising welfare costs. The other option would be raising taxes to increase revenues. And while I might not have a degree in economics, it doesn’t take a genius to see that burdening the public with more taxes when times are hard is a smart maneuver. So while Congress might be controlled by the Democrats at the moment, there is a possibility that they might at least extend the cuts for a few years in order to show that they do care about the middle and lower class, but possibly end the cuts for the highest tax bracket.
I will continue tomorrow with more tomorrow. For those who haven’t heard yet, John McCain won the Florida primary, and it is rumored that Rudy Giuliani will drop out of the race tomorrow and endorse McCain. If that turns out to be true, that will give McCain a serious boost going into Super Duper Tuesday next week. Stay tuned.