Two recent economic reports show the depth of economic mismanagement by the Bush administration. First, it was reported last week that the unemployment rate has risen to 6.1 percent in yet another indication of the poor state of the labor market. Second, the Congressional Budget Office (CBO) announced that it expects the current year’s budget deficit will be around $400 billion.

The “Jobs and Growth Tax Relief Reconciliation of 2003” bill (HR 2) that President Bush signed into law with much fanfare on May 28 is chock full of tax cuts that “sunset” – that is, they revert back to pre-2003 law. When combined with the previous Bush tax cut, “The Economic Growth and Tax Relief Reconciliation Act of 2001,” which is also full of tax cuts that slowly phase in and then end altogether, the result is like something out of Kafka. However, the difficulty for the IRS of creating forms and instructions to reflect yearly changes and taxpayer confusion are not the worst consequences of these bills.

Conference negotiations to reconcile the tax cuts bills passed by the House and Senate are expected to begin tomorrow, and Congress hopes to pass a tax cut bill by the Memorial Day recess, although this may prove impossible.

Federal Reserve Board Chairman Alan Greenspan doesn't think that tax cuts are needed now and warns about the danger of growing budget deficits. (See this New York Times article). Recently, the International Monetary Fund issued its economic report that advised the US against passing more tax cuts. Hundreds of economists, including a number of Nobel Laureates, oppose tax cuts. According to a number of polls, most Americans don't want more tax cuts, either.