WASHINGTON, Feb. 27 (UPI) -- President George W. Bush's dividend tax cut plan threatens the economy by expanding the national deficit, congressional Democrats said Thursday. When combined with the cost of a possible war with Iraq, the plan could force Social Security and Medicare into insolvency, House and Senate Democrats said.
Senate Democratic Leader Tom Daschle, D-S.D., and House Minority Leader Nancy Pelosi, D-Calif., took exception with the president's proposal to cut taxes on stock dividends by about $700 billion over the next ten years -- a plan introduced Thursday by the Senate Finance Committee.
"The President's so-called stimulus package is nothing more than a sham, wrapped in spin, shrouded in deception. The White House's plan will add some $1.5 trillion to our nation's debt, while providing no real benefit to most American families," Daschle said.
Although Bush has promoted the plan as benefiting seniors, who often earn a significant portion of their income from stock dividends and other fixed income securities, Pelosi said that most retirees would get little in return for the plan.
"(The GOP) claims that the president's proposal to eliminate taxes on dividends will help the average senior. It won't," Pelosi said. "Two out of every five elderly taxpayers would receive next to nothing from the Bush tax cut proposal -- less than $2 per week. Nearly four out of every five seniors would receive less than the 'average' tax cut that President Bush claims seniors would receive."
"In total, the two-thirds of all seniors who make less than $50,000 per year will receive only four percent of the dividend tax cut," she added. "What's going on here?"
Daschle detailed what his analysis of the tax plan means for seniors.
"The White House claims that the average senior will receive $522 from this tax cut," he said. "This is another example of the kind of bait-and-switch claims that are eroding this administration's credibility. Under this plan, enormous sums will go to the two-tenths of one percent of seniors who earn a million dollars per year and more. They will get an average of $52,000 from this tax cut. But the two-thirds of our seniors who live on less than $50,000 per year will receive an average of only $87. A buck-sixty-seven a week."
Daschle Thursday also released a report assailing the administration's performance on homeland security efforts, claiming that in the rush to fund a war with Iraq and a tax cut, the priorities of homeland security have been ignored.
"For that reason, this morning, we are releasing this report. It contains a report card on what the Bush administration has done since September 11th to prevent another terrorist attack on American soil. It's not terribly reassuring," he said. "Overall, the administration gets a 'D minus.' And that grade may be charitable. This report also lays out the next steps the administration needs to do over the next six months to make America less vulnerable to terrorism."
And what it needs to do -- say Democrats -- is spend more money on homeland security and abandon the tax cut proposal.
"This morning, we are introducing an emergency bill to provide $5 billion in new funding for first responders," Daschle said. "We have tried repeatedly in the past to pass many of the provisions in this new bill. The president has refused to support them -- even calling some of them a waste of money. We are calling on the president to work with Congress to pass this emergency funding without delay. No more blaming others, and no more delay."