And they’re off. The 108th Congress is now in session, and both parties are coming out of the gate at full speed, jockeying to get their bills and agendas through and to keep those of their opponents at bay.

The first issue at hand is the opposing economic stimulus packages of the president and the Democratic Party. Tuesday morning President Bush announced his plan, and the stock market began to surge immediately, in large part because of the promise of the elimination of taxes on dividends included in the Bush stimulus package. This is a very important step that should have been taken a long time ago, and it will go far in encouraging investment.

When people can make more money by investing because the government is no longer greedily siphoning it out of the economy, there is obviously greater incentive for them to invest. When more people invest money in corporations, the corporations have more money to develop new technology, reducing production costs and lowering consumer prices. They also have more money to hire more workers. With lower prices and more jobs, more people enjoy a higher standard of living.

Outside of the pragmatic reasons for the elimination of these taxes is a question of principle. The tax on dividends is, in every sense of the term, a double tax. The same money is taxed once as corporate profit and again when the shareholder receives them.

Tuesday afternoon, however, the Democrats, who apparently find the principled and pragmatic approach to economic stimulus offensive, announced their own plan, which, not surprisingly, did not include such cuts on dividend taxes. Rather, they attacked the idea, claiming it was one more attempt by the Republicans to cut taxes for the rich.

They seem to have forgotten the ’90s happened, and it’s not just the rich who own stock these days. They also don’t seem to have considered any effects the elimination of dividend taxes will have beyond taking less money from stock owners.

The next major disagreement is on Bush’s plan to accelerate the income tax cuts that have already been passed but aren’t supposed to be phased in for several more years. The reason tax cuts are good for the economy is it leaves more money in the hands of the people who can best spend it. The citizens who get to keep more of their own money will spend it, boosting consumption and causing companies to step up production and create more jobs. Instead, they may invest it or put it in a bank, making more money available for the banks to loan to those who will either invest spend it.

Under Bush’s plan, all of this will happen sooner rather than later. The Democrats claim, however, that in the current economy, the tax cuts are a bad idea, and they prefer to put them off until the economy is better.

Essentially, they prefer to wait until the economy is better before we fix it. They have not, however, offered any explanation as to why tax cuts would not have all the effects described above when the economy is bad.

These obviously are not the only differences in the two plans. We will likely see much contention between the two parties on many issues as the Senate fights it out on the issue of economic stimulus, and this will be a mere foretaste of what is to come on many issues over the next two years.

The Republicans will undoubtedly win out in the end. The far left Democrats can only filibuster for so long before a few of the more moderate ones will help the Republicans to break it. On the stimulus issue, it’ll be a photo finish, but the Bush plan, and reasonable economic policy, will prevail.

Albert ScovellDaily Mississippian (U. Mississippi)