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Make 2008 a year to celebrate

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POSTED: January 24, 2008 5:02 a.m.
Political reporters love a horse race. Bruising campaigns — with their polls, promises and pandering — offer endless excitement for scribes. By contrast, day-to-day governing — with its conversations, cooperation and compromises — seems boring.
This year, the presidential primary process starts earlier than ever. It might last for months, or it might be effectively over by February. In any event, political coverage in 2008 is likely to focus on the selection of our next president. That gives our leaders an opportunity, if they’re willing to seize it.
For their part, lawmakers need to fix the budget process. Every year, it winds up being a costly train wreck.
The federal government’s fiscal year begins on Oct. 1. But each year, lawmakers struggle to get their act together. All too often they miss the deadline, forcing them to pass a “continuing resolution” to keep the lights on in federal buildings.
This year was especially difficult. By mid-December, only one of the 12 spending bills Congress is supposed to pass had been signed by the president. The other 11 were rolled into one “omnibus” spending bill.
This monster, some 3,400 pages long and two feet high, hit congressional desks just hours before the lawmakers were supposed to vote on it. The Senate got a full 46 hours, while House members got a mere 22 hours. Even lawmakers who specialize in speed-reading had no idea what they were voting for.
This is no way to run a government.
The president sends his proposed budget to Capitol Hill in early February. That gives lawmakers plenty of time to pass spending measures. In fact, they have longer than they used to. Until the mid-1970s the fiscal year ended in June. Lawmakers pushed that back to September to give them more time to write the budget, and they still can’t get the job done on time.
Also, Congress should release spending bills at least a week better before they’re voted on, so lawmakers, journalists and bloggers could check the fine print and identify any pork projects or other surprises.
Meanwhile, President Bush can take a small step that could pay big dividends to taxpayers: Index capital gains to inflation.
Right now, anyone who sells an asset such as a stock or a house must pay capital gains taxes on the increase in that asset’s value, regardless of inflation. This can hurt investors who hold an asset for many years and realize only a small real, after-inflation, gain. In some cases the investor pays more in taxes than the asset actually earned.
Indexing capital gains to inflation would be a technical change to the tax code — but that’s actually an advantage. President Bush can make it without congressional approval, so he could help investors without any undue delay.
This change would also help ease worries about the housing market. In the last year, many homeowners have seen the assessed value of their homes erode. By slashing the capital gains tax that long-time homeowners might have to pay, Bush would give a subtle boost to consumer confidence and alleviate the tax-related reason that some people have for holding on to their homes. It’s a much better step than a direct federal intervention to prop up the housing market.
This is the time of year when people make resolutions: to lose 30 pounds, eat more vegetables or exercise more. So why not Congress? Having the spotlight on the presidential candidates should ease the partisan pressure on those who remain in Washington and make it possible for them to solve some problems that have plagued policymakers in recent years.
The administration and Congress should vow to do better in 2008 than they did in 2007. If they succeed, our elected leaders can leave a stronger country no matter which candidate wins the race for the White House. That’s a resolution that would benefit all of us.

Feulner is president of The Heritage Foundation (heritage.org).
 

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