Watching the Republicans hammer out a tax cut compromise one has to wonder how it’s going to end happily come November. This majority seems to feel “constrained” by a $70 billion limit on the price tag for a tax cut package to avoid a filibuster fight in the Senate. Why, after all that Reagan taught this party, not to mention this country, are any Republicans talking about the “price tag” for a tax cut? The policy with the price tag is tax increases. Shouldn’t tax cutting be the one issue on which all of the Republicans, with the exception of Senator Snowe, can agree? Why and how did the Republicans let themselves get browbeaten by the Democrats into merely temporary extensions of some of the most successful policies enacted by a Republican president?

Is this any way to inspire people to vote Republican in 2006? The American people aren’t asking for compromise. On the contrary, they elected – twice – a president who made tax cuts on dividends and capital gains one of the centerpieces of his campaign platform. No doubt that’s because the tax cuts worked. Ever since the end of a brief recession early in President Bush’s term, the economy has been going gangbusters, posting 4.8% annualized growth in the first quarter this year even while oil prices are so high that Congress spent last week nattering about windfall profits taxes.

The stock markets, in which increasing numbers of American working families and retired persons invest, have also benefited from dividends and capital gains tax cuts. One analysis prepared last year by the American Shareholders Association at the two-year mark for these tax cuts found that in the first 180 days after enactment, the incentives created by the tax cuts stimulated the creation of $2 trillion in shareholder wealth and handed even more money back to ordinary Americans in the form of increased dividend payments.

So why have the Republicans bowed to Democrats, who we thought were in the minority, and some misguided deficit hawks in the party who bemoaned tax cuts for “the rich” in times of government overspending? Instead of making these spectacularly effective tax cuts permanent, the Republicans are for extending them for merely another two years. As for the Democrats, let them stew over the charts prepared by Senator Grassley showing that, in terms of savings as a percentage of total tax liability, seniors earning less than $50,000 a year are the biggest winners of these tax cuts, saving 17.1% of their current tax bills.

The Republicans seem to be thinking that accepting another temporary extension will spare them the political heat of a filibuster fight over permanent tax cuts, letting them win re-election and giving them another try to make the cuts permanent in two years. The party might well be wrong. The problem with such a strategy is that Republicans tried this once before when they first passed temporary tax cuts. They were returned to the majority precisely in the hope that they would act to make the tax cuts permanent. Fail the American people and eventually they’ll forget why they keep empowering the Republicans in the first place. The Republican Party are only going to get one shot at redeeming their promises between now and November.