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Will a tax cut really have impact?

The House passed a tax-cut bill Thursday. We're well on the way, in the words of Treasury Secretary Paul O'Neill, to "putting more money back into the hands of people who will buy homes and cars and bigger homes and bigger cars."

If American cars get any bigger, we'll have to start giving them their own addresses. Anyway, it's hard to imagine this bill sending a whole lot of people racing to the showroom. The House is only planning to ship us $180 per capita right now. The other $900 billion in cuts would creep in gradually, over the next 10 years, by which time current members of Congress will have gone to lobbyist heaven and somebody else will have to figure out how to balance the budget.

So it's a daunting task we're being given, folks — jump-starting the economy on $180 a head. But O'Neill trusts the American public to do the patriotic thing and go into debt, leveraging the hope of a couple hundred dollars into a 15-year car loan or sizable addition to the family mortgage. "As debt service money . . . it's not a trivial number," he assured the Senate Finance Committee recently.

The treasury secretary has been all over the place for the past couple of weeks selling the tax cut, and he's rapidly becoming my favorite Cabinet member. We have not seen such a cranky administrative spokesman since the age of Sununu. Imagine the warmth of James Watt and the credibility of Ron Ziegler all rolled up in a package that keeps reminding everybody that this is not the way they do things back in the aluminum industry.

"Frankly, one of the things that's annoying to me as I come out of the private sector back into the public sector is to see this kind of chart," he snapped last Sunday on NBC, when Tim Russert was trying to get him to admit that the richest 1 percent of taxpayers would get 43 percent of the benefit from the Bush tax cuts.

That factoid is a particular sore point. O'Neill regards it as incredibly unfair when critics include the effects of the elimination of the estate tax in their calculations.

"It's only possible for them to be right if you grant them 50 assumptions that nobody in their right mind would accept," he said last week.

This was during one of O'Neill's most legendary performances, in which he kept bragging that he had not worked in Washington since the Gerald Ford administration.

While O'Neill seems to be cultivating the public aura of a man who's planning to take away Tiny Tim's Christmas dinner, he is said to be a fine human being in private life. President Bush made that very point the other day when he went to give a pep talk to the Treasury Department staff. "He's got his priorities straight. He loves his family," Bush explained.

This was no aside. The main point of Bush's talk was to remind the Treasury workers to love their families. "The way I like to put it is this: There's no bigger issue for the president to remind the moms and dads of America, if you happen to have a child, be fortunate to have a child," he said.

But we digress. The first part of the tax-cut plan whisked through the House Thursday while the Democrats flailed helplessly.

In congressional debate, metaphor is all. "If a contractor is building a house and comes in under budget, he does not get to spend that estimated surplus on marble counter tops or solid gold fixtures. The unspent money would go back to the homeowners," said Kay Granger, R-Texas, in support of the cut.

This was possibly the most thought-provoking moment in the tax discussion. Has anybody ever built a house that came in under budget? Does this sort of thing happen frequently in Texas? Here in New York, if a contractor called up and announced that he had been given too much money to play around with, most people would be so stunned they'd probably agree to spring for solid gold fixtures.

The tax cut now goes to the Senate, which plans to change it and pummel it around and sit on it for months and months. In the meantime, O'Neill is hoping you'll get on the waiting list for a Unimog.

New York Times News Service