Thank God I voted first

By Michael Kinsley (THE GUARDIAN, 07/11/06):

What will a Democratic House of Representatives be like? The Republicans have been painting a portrait of Democrats roasting children on a spit in the Capitol Rotunda. Hoping for a more encouraging view, I picked up A New Direction for America - a 31-page manifesto released by House Democrats in June. All I can say is, thank goodness I voted beforehand.The Democrats promise "security, prosperity and opportunity" in "diverse, safe and vibrant communities". They will "protect Americans, secure our borders, and restore our position of international leadership" through "homeland, energy, and diplomatic strategies". And we're only up to page three.

The Democrats' two favourite words seem to be "tax credit". They promise to "modernise" the tax credit for research and development; to "expand and improve" the already ludicrously complex system of tax-deductible retirement accounts; and introduce a tax credit for college tuition up to $3,000. They also want a broadband tax credit for internet access in rural areas.

They call for a 50% tax credit for employee health insurance paid for by small businesses as their solution to the healthcare crisis. And - my favourite - they want a tax credit to cover the administrative costs of encouraging employers to offer their employees the option to convert their retirement plan into an annuity when they retire. I don't know what that last one is about, but I smell an interested party.

The problem with tax credits is that they never appear in the budget, so they never get the same scrutiny as direct spending, although their impact on the deficit is the same. By definition, they cost more than whatever benefit they are intended to achieve, since no one is going to be induced to spend an extra dollar on, say, dance lessons unless the subsidy is worth more than a dollar.

Tax subsidies often go to person X to help person Y (eg, to a corporation to help its employees), and person X gets a slice of the benefit - often a big slice. And the consequences are rarely examined. Take the tax credit proposal for tuition fees, for example. Why should a young person who is working and paying taxes subsidise someone in college who will soon be better off if he or she isn't already?

Fairness is one of three qualities that need to be restored to American public life after six years of George Bush. The other two are honesty and competence.

Honesty is not just therapeutic. Fiscal honesty is a practical necessity. A New Direction for America rightly denounces the staggering fiscal irresponsibility of Republican leaders and duly promises "pay-as-you-go" spending. But in the entire document there is not one explicit revenue raiser to balance the many new spending programmes and tax credits.

Competence, of course, brings us back to Iraq. Apparently, and unfortunately, Bush is right that the Democrats have no "plan for victory". (Neither does he, of course.) For national security in general, the Democrats' plan is mostly about new cash benefits for veterans. Regarding Iraq, the Democrats' plan has two parts. First, they want Iraqis to assume "primary responsibility for securing and governing their country". Then they want "responsible redeployment" of American forces.

Older readers may recognise this formula. It's Vietnamisation - the Nixon-Kissinger plan for extracting us from a mistake. But Vietnamisation was not a plan for victory. It was a plan for what was called "peace with honour" and is now known as "defeat".

Maybe A New Direction is just a campaign document. My fear is that the House Democrats may try to use it as a basis for governing.