As the war in Iraq dominates media coverage, a major domestic issue has seemingly slipped under the American public’s radar. This past Friday, President Bush moved one step closer to passing his massive tax cut plan, as the Senate only managed to shave $100 billion off the $726 billion proposal.

Bush’s gigantic, sweeping plan, which promises serious cuts in everything from income tax to capital gains over the next 10 years, seems well on its way to approval, as many moderate opponents in the Senate seem unable to garner enough support for further decreases.

This partial victory for the Bush administration comes in response to the almost constant criticism that the president has ignored the sluggish U.S. economy in favor of Iraq and the war on terrorism.

Fears of an outrageous deficit and debilitating cuts in many social programs have brought Democrats and some moderate Republicans into opposition. And considering the House only approved the budget by a margin of three votes, Bush’s cuts are obviously not universally revered, and some ugly fighting will likely ensue next week as both sides try to hammer out an acceptable fiscal plan.

This debate in the Capitol sheds light on one of the great dividing lines between Democrats and Republicans: do we cut taxes or increase spending? The Democratic camp mostly stands by the latter, believing that increasing government spending by offering more government services increases consumer spending and quality of life. The Republicans mostly support the opposite philosophy that cutting taxes gives people more money to spend and invest with, thereby increasing consumer spending and quality of life.

Since many famous economists have written large books explaining and discrediting both systems, I’m going to keep it simple and say that both methods work to help the economy, just in different ways that affect different people.

The real problem with Bush’s plan, however, is that he wants to have it both ways. Along with slashing the budget, Bush is also calling for increased spending to cover for the war and reconstruction in Iraq, reconstruction efforts in Afghanistan, homeland security and Social Security coverage. The Washington Post has reported that the hundreds of billions of extra dollars necessary for these projects could result in a $1.8 trillion deficit over the next 10 years.

Every time America’s budget runs a deficit, it adds to our national debt, and as of this writing, the debt totals about $6.5 trillion and grows approximately $1.36 billion a day (though that pace will definitely increase as time goes on). While no one really knows just how much money the United States can borrow, one thing is certain: our national debt can’t go up forever.

Earlier this month, Federal Reserve chairman Alan Greenspan said that while the economy needs some sort of stimulus, it should be ‘revenue-neutral,’ emphasizing that big deficits could do a lot of harm to the economy, despite any tax breaks that came with them.

It’s implausible for Bush and the American people to expect they can have it both ways; if we’re going to fight a war on terrorism, then it’s naïve to believe we won’t have to pay for it.

The economy isn’t in good shape, but it is recovering, as ‘uncertainty’ seems to be the only thing holding back serious progress especially considering the 8 percent gain in the Dow Jones last week on word the war was going well for the United States. As terrorists are captured and Hussein’s regime is overthrown, many of the question marks hovering over America’s future will disappear, allowing many more options for investors. Chances are if Bush can decisively win the Iraqi campaign in the next month, the economy could recover without any government intervention.

In his State of the Union address, Bush promised his administration ‘…will not pass along our problems to other congresses, to other presidents and other generations.’ While Bush may have been referring to Saddam Hussein and weapons of mass destruction when he said ‘problems,’ the statement appropriately applies to fiscal issues as well.

Our nation’s outrageous spending pace is quickly going to become a liability for future congresses, presidents and generations, which will be faced with an almost insurmountable debt and the myriad fiscal problems that could follow. While it’s imperative that Bush help the economy recover, he must also be wary of the long-term effects of his ambitious plan. Let’s be responsible and prudent with our budget, as recklessness could cost us a lot more than Bush is letting on.