For the second time, in as many years, the President and his tax-slashing allies in Congress have passed a budget that calls for massive tax cuts. Though the recent precedent-setting effort of congressional Republicans last week to pass a budget resolution by agreeing to different tax cut packages leaves much uncertainty about just how large a tax cut the country will be saddled with, a large tax giveaway seems assured. Within the next several weeks, we will learn whether this round of tax cuts will be limited to the Senate's $350 billion or be as high as the House's $550 billion, but this is just the beginning: the budget resolution actually provides for a total of $1.3 trillion in tax cuts over the next 10 years. Whatever is decided, the tax cuts will be far more than the country can afford. As a result, most of us, and future generations, will be stuck footing the bill for a huge expenditure that will do little, if anything, to stimulate the economy, lower the unemployment rate, close the ever-widening gaps in state budgets, meet the educational needs of our children, or address the shortfall in Social Security or pay for a prescription drug plan for our seniors.

As discussed in newspapers across the country, support for preserving the President's costly $726 billion tax cut package (misnamed the "Growth Package") is weakening. On March 25, the Senate voted to shrink the $726 billion package down to $350 billion. (In an earlier vote, the House passed the full $726 billion tax cut - and more than $260 billion in cuts to veterans' assistance, Medicaid, Medicare, food stamps and other programs - in a very close vote, 215-212.)

EPI, Campaign for America’s Future and State Groups Release Reports Detailing Damage Caused by Bush Tax Cuts

Check for the report on the problems your state will face if the Bush tax cut goes through – and find out how to work to stop it.

A person can’t open a newspaper these days without catching sight of at least one article reporting on recent slashes in some local or state budget or in one of the many threads of the country’s social safety net. From coast to coast, over the course of just the last two weeks, cuts have been announced: Oregon Governor Ted Kulongoski (D) announced that several million dollars will be cut this year and next from the state’s Medicaid program, which had been heralded for its success in providing mental and dental benefits, in addition to the traditional hospital care, to Oregon’s poor, elderly, and disabled residents; newly-elected Maryland Governor Bob Erhlich (R) has proposed a $25 million cut in state-funding for child care for low-income parents – this is on top of a 70% cut in funds for Maryland’s Child Care Resource Centers Network, which provides families of all income levels with guidance and information on available local child care providers.

On February 3, Virginia’s House of Delegates voted 69-29 to repeal its state estate tax, bucking a trend among state legislatures to work to preserve the tax’s revenue in a time of record setting state deficits. Governor Mark Warner (D) had petitioned hard to preserve this piece of revenue for Virginia, which is facing an estimated 1.1 billion budget gap for FY 2004, but the vote is being touted by the Republican-controlled legislative body as a “veto-proof” majority. Though repeal advocates in Virginia argued that repeal would protect the state’s small farms and family businesses, data from the USDA and the Federal Reserve show that both the average large farm and family business in Virginia already fall well below the current $1 million exemption under federal law.

The President (faced with a 6 percent unemployment rate, increased homeland security needs and costs, and a projected $300 billion deficit for the coming year) has decided that repeal of the estate tax must be made permanent – at all costs. And the costs are great: nearly $56 billion in the first full year of repeal. But you wouldn’t know it from the President’s budget charts.