Sen. Clinton Blasts Bush Tax Cut for 'Crowding Out Spending'

By Christine Hall | July 7, 2008 | 8:27 PM EDT

( - "What we have here is an impact, a set of consequences that will crowd out much of the spending that we believe is important to continue...progress and prosperity," said Sen. Hillary Rodham Clinton (D-N.Y.) commenting on President George W. Bush's $1.6 trillion tax cut plan pending before the U.S. Senate.

Sen. Clinton discussed the Democratic party's budget priorities Monday during a speech before the Religious Action Center of Reform Judaism. She called the budget a "moral statement."

"It is a manifestation of our vision and our values and our priorities," said Clinton. "What probably bothers me most about this approach that the administration is taking is that it is so dismissive of the needs of our children and...grandchildren. We'll be putting ourselves back into a deficit position with new spending priorities of the administration," Clinton warned.

Clinton, who serves on the Senate's budget committee, said the president's tax cut package would mean less money to spend on government programs, such as adding a prescription drug benefit to Medicare, hiring more public school teachers and building a high speed passenger rail system around the country.

"When it comes to education, when it comes to health care, two of the most basic needs that we have in our families and our communities, the budget that is being proposed will not meet the needs that are out there," said Clinton.

She also objects to the Bush tax cut for other reasons. She believes that possible economic trouble combined with upcoming administration budget priorities may reduce future tax revenue, straining the federal budget.

"That is a gamble I don't think we can afford to take," said Clinton. "We could be off either by underestimating the surplus rather dramatically or underestimating a deficit that could come back because the revenues are not there to keep growing the way we're projecting," she explained.

"There's no doubt in my mind that the administration will come and request a large increase in defense spending," Clinton added. "We've got a [Bush administration] review [of the defense budget] going on, in part, I would argue, because they don't want to come with the large increases this time. They want it to be reviewed for a while, until they get the tax cut. Then they [will] come in with the increase in defense spending," she predicted.

But Dan Mitchell, a tax and budget expert for the Heritage Foundation, said Clinton's criticisms were merely setting up a "straw man."

"I suppose I have to give her credit for honesty. She's saying that we don't want tax cuts because we want government to spend more, which I think is the exact same motive behind those who are arguing on the basis of so-called debt reduction," said Mitchell.

If, as Clinton warned, future spending priorities raise the specter of 1980s-era deficit spending, "it's the responsibility of lawmakers to say, 'if we're going to increase spending here, we have to reduce spending there,'" said Mitchell.

Fear of deficit spending is no excuse for opposing tax cuts, according to Mitchell. "This is the standard argument: 'It's not really $1.6 trillion [in tax cuts] because we're going to spend $300 billion of prescription drug benefits,' and 'we're going to get rid of the Alternative Minimum Tax, which would be a $300 billion tax cut.' Well, why not add 50 more things and make it a $10 trillion package?"

"Unless we want politicians [on] an orgy of new spending to finance God knows what, whether it's what Hillary's talking about or somebody else," Congress needs to pass a tax cut, Mitchell concluded.