Cato Daily Dispatch for December 9, 2002
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Bush Appoints New Treasury SecretaryU.S. Receives Copy of Iraq's Weapons Dossier
California Headed for Budget Cuts and Tax Increases
Bush Appoints New Treasury Secretary
President Bush today named John W. Snow, chairman of the transportation and railroad conglomerate CSX Corp., to replace Treasury Secretary Paul O'Neill and lead an economic team retooled for the president's re-election drive, according to The Associated Press.
"John Snow has excelled as a business leader, an expert on economic policy, an academic, and as a public servant,'' Bush said. "He'll be a superb member of my Cabinet.''
Snow, 63, a former Ford administration official whose company has helped fund the campaigns of Bush and scores of other GOP politicians, will be the point man as the president presses a new tax-cutting economic package.
"In a varied and productive career, John Snow has shown consistent qualities of foresight and integrity and public spirit,'' Bush said. "He's led one of our nation's largest railroads with skill and success.''
"I expect Snow will particularly understand the importance of an investment-friendly tax code given that firms such as CSX form the backbone of a productive economy with large investments in capital equipment," said Cato Director of Fiscal Policy Chris Edwards in a statement. "Snow will be an excellent spokesperson for the administration's upcoming stimulus bill that is expected to include a depreciation tax cut component that will spur growth in a wide range of industries that need to continually purchase new machinery and equipment to stay competitive."
U.S. Receives Copy of Iraq's Weapons Dossier
The United States today received a copy of Saddam Hussein's massive arms declaration as U.N. inspectors began combing the dossier for clues about whether Iraq is free of weapons of mass destruction, according to The Associated Press.
Reversing an earlier decision, the U.N. Security Council agreed late Sunday to give the United States and the four other permanent council members - Britain, France, Russia and China - full copies of the 12,000-page declaration.
The council's 10, non-permanent members, including Syria, will only see a censored version of the document once weapons inspectors have gone through the report and gleaned it of sensitive material - including possible instructions on bomb-making.
Ivan Eland, Cato's director of defense policy studies, had this to say about the weapons inspectors in Iraq: "Iraq has now accepted without conditions the restarting of inspections of its programs to develop weapons of mass destruction. This development should slow the U.S. government's rush to war. Although Saddam Hussein has manipulated the inspections in the past, he knows that his survival is at stake. Therefore, he actually may now have a much greater incentive than ever before to comply in good faith with any inspections. The United States and the international community have little to lose by giving Hussein a chance to fully comply with inspections before a war with Iraq is underway."
California Headed for Budget Cuts and Tax Increases
When times were good and billions of dollars in income tax payments were pouring in from high-tech millionaires, California lavished raises on state employees, expanded health care benefits for the poor, cut taxes on car licenses and invested heavily in education and transportation.
Those days are over, according to The New York Times.
With its huge economy stalled and state revenues plunging, California has descended into its worst budget crisis in a decade and is now facing an excruciating round of budget cuts and possible tax increases. State officials are proposing deep reductions in education, health services, and other programs to deal with a budget shortfall that could total $25 billion in the next 18 months.
In Cato's "Fiscal Policy Report Card on America's Governors: 2002", Cato Senior Fellow Stephen Moore and Stephen Slivinski, director of tax and budget studies at the Goldwater Institute, gave California's finances under Gov. Gray Davis an "F."
"Although Davis has tried to blame the state's fiscal detioration on the policies of his predecessor, Republican Pete Wilson, the truth is that when Davis entered office he inherited a $12 billion two-year surplus," write Moore and Slivinski. "Gray Davis's fiscal performance has been one of severe budget bungling and overspending."
Wyatt Dubois, editor, wdubois@cato.org