star-telegram.com: Jack Z. Smith

JZSmith: Let's play small ball with autos

Fri, 09 May 2008 12:56 CDT

By JACK Z. SMITH

In baseball, it's called "small ball" when a team emphasizes speed and strategies such as sacrifice bunts, rather than relying on big home-run hitters.

In basketball, "small ball" features smaller, quicker athletes who run the court relentlessly and leave larger, slower opponents in the lurch.

It seems increasingly obvious that the global auto industry will be playing a game of brutally competitive small ball in coming years. The manufacturing of more small, fuel-efficient and less-polluting cars is likely to be the dominant trend among the world's automakers for several decades to come -- and that includes U.S. automakers long accustomed to thinking big in terms of vehicle size.

We're already starting to see a striking movement toward small ball everywhere from the lots of U.S. dealerships to rapidly emerging Asian car markets.

Oil, gasoline and diesel prices are at record highs, with average U.S. gas prices for regular unleaded fuel at about $3.65 a gallon.

Sales of gas-hog SUVs that get 15 miles per gallon are plunging. Sales of subcompacts, compacts and hybrids that get 30 to 45 mpg are rising dramatically -- in some cases up more than 40 percent from a year ago.

Sales of mid-size and small "crossover" models also are strong. The crossovers are like smaller SUVs, but more fuel-efficient and built on a car chassis rather than a truck frame.

"The era of the truck-based large SUVs is over," according to Michael Jackson, chief executive of AutoNation, the big auto retailer. Jackson was quoted in a May 2 New York Times article headlined "As Gas Costs Soar, Buyers Flock to Small Cars."

As I wrote last week in detailing my purchase of a new compact Chevrolet Cobalt, I've long played small ball when it comes to driving. I prefer small cars for financial and environmental reasons. That was true even when I regularly bought gas for 25.9 cents a gallon as a college senior.

It looks as if higher-priced oil and gasoline are here to stay. Prices might drop somewhat below the current levels, but I don't think we'll ever see really cheap fuel again.

Can you believe that the average Texas gas price was $1.01 at the tail-end of 2001? We'll never see that again, or come anywhere near it, barring some unforeseen development.

Here are some reasons cheap gasoline is a dinosaur (unless heavily subsidized by government) and why the global auto industry will be building far more small, fuel-sipping vehicles.

Most of the world's giant oilfields -- yielding petroleum that was relatively cheap to produce and refine -- were discovered long ago and are now in decline. Although there are still huge volumes of proven petroleum reserves, much of what's left will be more expensive to produce and refine. Higher environmental standards for fuels (such as reformulated gasoline and ultra-low-sulfur diesel) contribute to higher pump prices.

New U.S. fuel economy standards will require a 40 percent increase in fuel efficiency by 2020, to 35 mpg.

The most rapidly growing auto sales are in highly populated developing nations such as China and India, where many first-time car buyers can afford only small, cheap vehicles. Hence, the new $2,500 Nano "People's Car" being built by Indian carmaker Tata. It won't come with a radio, but it will get 50 to 60 mpg.

Tougher regulations designed to thwart global warming and curb air pollution are likely to increase costs for consuming fossil fuels, thus encouraging more small, fuel-efficient and less-polluting vehicles.

Plug-in hybrids could become much more prevalent in coming years. Eventually, totally electric and hydrogen fuel-cell vehicles could become widely produced and affordable.

But that could be a long way off. Meanwhile, as we brace for $4-per-gallon gasoline, the global auto industry is gearing up for a prolonged "small-ball" slugfest the likes of which we've never seen.

JZSmith: No more domestic vehicle blues

Tue, 06 May 2008 13:48 CDT

By JACK Z. SMITH

It had been 20 years since I bought a car for myself.

Six days ago, that long drought ended.

I bought a brand-new 2008 Chevrolet Cobalt at a west Fort Worth dealership. I really like the car and the price I paid for it. (More on that in a moment.)

I've always driven small, fuel-efficient cars -- accordingly, the Cobalt is a compact with a solid highway mileage rating of 31 mpg. But in buying it, I did something that was a sharp reversal of form: I bought a small car built in America by a U.S.-based automaker.

The last time I did that was in the very early 1980s, when I was a young, financially struggling Star-Telegram reporter with a wife staying at home with our two preschool daughters. I paid $1,000 cash for a used 1975 Chevrolet Vega, an ugly little army-green station wagon that should be in the General Motors Hall of Shame.

The Vega had beaucoup problems, including a regularly malfunctioning manual transmission that periodically required me to crawl under the car to unstick the gears. I once did this in a new business suit, drawing guffaws from passing motorists. Yeah, real funny.

Fifteen months ago, I exorcised those demons by writing about the Vega in a column that included this comment: "Ideally, I'd like for my next car to be made in America by an American automaker."

I want to see the beleaguered, much-maligned U.S. auto industry survive and thrive. It's important to keep decent-paying manufacturing jobs and industrial know-how in America rather than shipping it all overseas.

Sometimes it seems as if we're becoming a bipolar economy of wildly overcompensated CEOs and hedge fund managers at one end and undercompensated, uninsured working-class people on the other, with a shrinking middle class treading water in between.

My nightmarish experience with the Vega soon would steer my wife, Nina, and me toward Toyota, which long has built reliable, fuel-efficient small cars such as the Corolla. Nina drives a 2000 Toyota Rav 4, a small SUV. Having purchased the Cobalt, I sold my 16-year-old Toyota Tercel (still running well, with only 118,900 miles on it) to a family wanting a small car that gets good mileage in a period of $3.60-a-gallon gasoline.

The fact that I overcame my checkered Vega past and bought a Chevy Cobalt speaks volumes: It says that U.S. car makers are producing attractive, better-built small cars with good mileage ratings and pleasing price tags.

In purchasing the Cobalt, I finally was able to fulfill my wish of buying an American small car without feeling I was being played for a sucker. The vehicle is built at General Motors' plant in Lordstown, Ohio.

There's lots to like about my Cobalt. With a 2.2-liter engine, it has ample power to complement its good mileage rating. It drives quietly both in town and on the highway (in contrast to one rating declaring it "noisy").

The four-door, automatic-transmission sedan I bought is modest-sized but not tiny, with comfortable seating for four average-sized people. It has a good radio and CD player. It's got side air bags. The trunk is surprisingly large. I like the car's styling and the pretty, dark-blue color of the one I bought.

The price tag was not only pleasing but surprising. Reduced by ample rebates and discounts, I purchased it for $12,238 -- a figure low enough to allow me to pay cash and avoid a car payment. That price included tax, title and license, and I had no trade-in. The car has a good warranty and free roadside assistance package.

Considering all factors, I believe I probably got more bang for the buck with this car than I would have with some of the Cobalt's strong small-car competitors built by foreign-based carmakers. That's something I once thought I'd probably never say.

NEXT WEEK

A look at the auto industry in a time of great tumult, technological change and record-high gasoline prices.

A Cowtown cave-in?

Fri, 25 Apr 2008 04:36 CDT

By JACK Z. SMITH

Is the Fort Worth City Council about to cave in to the politically powerful development community on an issue that's vital to reducing intolerable traffic congestion in fast-growing areas?

That's how it's looking. Taxpayers, get a tight grip on your wallets.

The issue is what level of transportation impact fees should be levied on developers to help pay the heavy cost of building arterial roads to serve the explosion of residential and commercial development in new, far-flung areas of Cowtown.

It seems only fair that a substantial portion of the cost of these large roads of four to six lanes should be borne by the developments that most benefit from their construction. Currently, road capacity is being expanded at a far slower rate than is needed to keep pace with development.

The result is escalating gridlock. The consequences are jillions of hours wasted by frustrated motorists mired in traffic, increased air pollution and slower emergency response times for police, fire and ambulance vehicles.

The less developers pay in impact fees, the greater the burden for taxpayers will be. That increases the risk that the city either will have to raise the property tax rate to pay for new roads or that congestion will worsen as the population skyrockets in high-growth areas such as far north and far southwest Fort Worth.

As a result of lobbying by developers, the City Council is considering an ordinance that would impose very modest impact fees. The ordinance probably would raise only a tad more money than the current system, under which developers help pay road costs through "community facilities agreements" with the city.

Representatives of the development community were falling all over themselves at Tuesday's council meeting in expressing support for the proposed ordinance. It's no wonder, given that it probably would preserve the status quo. As it stands, the council might approve this ordinance in only four days, at its 10 a.m. Tuesday meeting.

My fears were stoked when City Councilman Carter Burdette, a retired lawyer and Harvard graduate blessed with great common sense, assailed the proposed ordinance with undiluted vigor at this past Tuesday's council meeting.

"Let me say right up front, it does not have my approval," he said. "It's not a solution. It's surrender."

The extra road money generated by the proposed ordinance would be "a drop in the bucket," Burdette said.

Therefore, it would contribute little toward reducing a staggering backlog of more than $1 billion in needed road expenditures, said Burdette, who represents much of west and northwest Fort Worth.

If the city continues on its present path, traffic could greatly worsen in newly developing areas beset with "leapfrog, helter-skelter developments," with the congestion becoming so stifling that these areas would become less desirable to live in and deteriorate, Burdette said.

He suggested a considerably higher level of impact fees that, as best I can tell, might raise roughly 50 percent more than the proposed ordinance. But even under Burdette's proposal, impact fees would be no more than 40 percent of the maximum allowed by state law. Impact fees would not be levied for added development in long-established areas that don't need new arterial roads.

Council members would be wise to heed Burdette's words, rather than to hastily approve a weak ordinance that gets developers off their backs but does little to address the pressing need for significantly increased road funding.

Cowtown's Costa: man with a plan

Fri, 18 Apr 2008 04:36 CDT

By JACK Z. SMITH

Most Fort Worth residents probably never have heard of Fernando Costa, even though the newly appointed assistant city manager has made a remarkable impact in 10 years at City Hall.

As Fort Worth's planning director for most of his tenure, he has guided the city in adopting much more thoughtful and effective planning and development policies. These strategies have helped revitalize the central city inside Loop 820, strengthen the tax base and discourage urban sprawl.

Costa has given the city a clear long-range vision of what it wants to become while helping formulate a meaningful blueprint for realizing that vision: the city's Comprehensive Plan, which he took a lead role in drafting in his first year here. It's updated annually and cited frequently.

Costa's impact is highly visible today in development occurring or planned in 16 designated "urban villages" where the city is encouraging pedestrian-friendly development that incorporates a variety of land uses -- e.g., residential, retail, office, public transit and recreational -- in the same area.

That higher-density development allows many urban residents to shorten work commutes and use mass transit -- or perhaps walk to work. The mixed-use approach reduces urban sprawl, freeway congestion and air pollution.

Two prominent examples of the urban village and mixed-use concepts that Costa champions are the dazzling development rising around the intersection of West Seventh Street, University Drive and Camp Bowie Boulevard west of downtown and the revitalization effort on once-deteriorating West Berry Street bordering Texas Christian University.

Within weeks of Costa's arrival at City Hall on April 20, 1998, I began hearing a steady buzz about him from excited civic leaders and aficionados of central-city revitalization. They correctly pegged Costa as a visionary leader with the foresight, drive and personality to re-energize the city's punchless, understaffed planning department.

"I saw it as a challenge," Costa told me Tuesday. "Generally speaking, I'm happy that the planning function has become a more important part of the way that city officials make decisions about Fort Worth's growth and development. ... Mayor [Mike] Moncrief often refers to the Comprehensive Plan as the city's game book, as a general guide for making decisions, because it describes the kind of city that we want ... and outlines the kinds of policies and programs and projects that can lead us to realize that vision."

Costa, 54, was born in Cuba, but his family fled the Castro regime in 1961 and moved to Miami when he was a child. He has a strong academic background in civil engineering and city planning. He came to Fort Worth after 11 years in Atlanta, where he headed the city planning department and helped plan its hosting of the 1996 Summer Olympics.

He's a resident of Fort Worth's Mistletoe Heights neighborhood just southwest of downtown and a proud father of three daughters (ages 25, 18 and 16). He was divorced two years ago, ending a 26-year marriage. He's president of the Rotary Club of Fort Worth.

Costa credits Fort Worth's Bass family with blazing the way for Cowtown's revitalization through its enormous downtown redevelopment effort. The Basses had traveled the world and seen how great metropolises could be energized by people living, working and enjoying recreational pursuits in an urban core, in stark contrast to the dead, dull downtown Cowtown of the 1970s.

Costa understands those things, too. Shortly after arriving here, he was patiently preaching the virtues of higher-density, mixed-use development that reduced reliance on the automobile. That concept now is gaining wide acceptance in North Central Texas.

"I don't get the kind of strange looks I did 10 years ago," he said. "Attitudes across the region have changed dramatically."

As a new assistant city manager, Costa supervises four vital departments: Planning and Development, Water, Engineering, and Transportation and Public Works. Few who know him doubt that he is up to the task.

Our society's safety net could use some mending

Fri, 28 Mar 2008 04:40 CDT

By JACK Z. SMITH

Former House Majority Leader Dick Armey once asked, "If Social Security is such a great program, why is it mandatory?"

Actually, Social Security is a great program precisely because it is mandatory. Ninety-six percent of American workers pay into the system. As a result, Social Security has a strong, steady flow of funding that has made it a tremendous safety net for the nation.

Along with Medicare, Social Security has played a huge role in slashing the poverty rate for the elderly from about 30 percent to less than 10 percent over the past 40 years.

This year, almost 50 million Americans will receive $608 billion in Social Security benefits. Nine out of 10 people 65 and older receive the benefits. Among the elderly, 52 percent of married couples and 72 percent of singles receive more than half their income from it.

If Social Security had not been made mandatory, there would be a much higher poverty rate among the elderly today. Many Americans wouldn't put money into retirement savings unless required to, just as millions of workers today don't participate in voluntary corporate 401(k) programs despite their attractive features.

The program's benefits have served as a crucial financial lifeline for several of my relatives, including my maternal grandmother. As a widow in her twilight years, she scraped by with Social Security as her primary source of income.

Social Security has been on my mind because its trustees released their annual report Tuesday on its projected long-term funding shortfall.

Although the program currently is generating surplus revenues, its cost is projected to exceed incoming revenues by 2017 as more baby boomers hit their rockers. By 2041, the trust funds are projected to be exhausted, leaving incoming payroll tax revenues to pay only 78 percent of benefits.

But if we make some adjustments, the program can be put on a sound financial footing for many decades to come.

That probably will require increasing payroll taxes and some very modest, gradual reductions in benefits. Congress adopted bipartisan Social Security reform legislation 25 years ago and can do so again.

The payroll tax is levied only on the first $102,000 of annual income. That cap could be boosted appreciably, perhaps to $150,000 or $200,000, and indexed to inflation. Even if the cap were $200,000, affluent people earning more than that still would pay a smaller percentage of their income into Social Security than do low- and middle-income workers.

The payroll tax rate, now 12.4 cents per $1 of earnings (half from workers, half from employers), could be raised modestly -- perhaps a half-cent.

Some benefit cuts might be made. For example, the age for receiving full retirement benefits might be raised very slightly and very gradually, because people are living longer.

Several million state and local government employees currently not paying into Social Security might be brought into the system, as federal employees were in 1983.

Greater protection should be provided to the trust funds to ensure that Congress and the White House stop (or at least greatly decrease) the shortsighted practice of spending surplus Social Security revenues for other government programs.

President Bush's departure from the White House in January could ease congressional passage of bipartisan legislation to strengthen and preserve Social Security for future generations. The sooner that strong legislation is adopted, the less severe the remedial measures must be.

If you don't believe me when I say that this is a worthy program, you might recall Bush's words on May 15, 2000, in Rancho Cucamonga, Calif., when he was campaigning for president. Social Security, he said, is "the single most successful government program in American history."

ONLINE

Social Security

Administration: www.ssa.gov

We've been subprime-slimed

Fri, 14 Mar 2008 04:37 CDT

By Jack Z. Smith

Greed, deception, immorality and notoriously sloppy business practices have been hallmarks of the United States' epic mortgage meltdown.

Americans coast to coast are experiencing the fallout in painful ways: job losses, home foreclosures, declining property values, shrinking 401(k) balances and deteriorating holdings in employee pension plans.

Negative repercussions are being felt worldwide by financial institutions, governments and individual investors who blanch at the mention of "mortgage-backed securities."

What's really troubling about America's housing bust is that it was so avoidable.

In our zeal to minimize business regulation and open up home ownership to more Americans, we lost sight of a vital principle: Strong rules are still needed because there always will be charlatans and slimeballs who will do people dirty or in some other way cast ethics aside if they can make an extra buck in the process.

This common-sense principle is so simple and basic that even the powers-that-be in Washington suddenly are beginning to embrace it -- albeit several years too late to avert the current fiasco.

On Thursday, Treasury Secretary Henry Paulson declared that stronger oversight of mortgage lending is needed to avoid repeating the current housing debacle and accompanying credit crisis.

Is Paulson, the chairman of President Bush's Working Group on Financial Markets, just now figuring out what already should be overwhelmingly obvious to most Americans?

Paulson said one of the group's recommendations is that both federal and state regulators beef up oversight of mortgage lenders. Another recommendation calls for state financial regulators to implement strong nationwide licensing standards for mortgage brokers, The Associated Press reported.

Tougher regulations undoubtedly are needed for:

Mortgage brokers who, enticed by the prospect of higher commissions, steered homebuyers into deceptively high-cost subprime loans that weren't in their best interests.

Lenders who made loans that included hidden fees, hefty balloon payments and resetting interest rates that could escalate buyers' monthly mortgage payments by hundreds of dollars in the blink of an eye.

Appraisers who bowed to pressure from lenders and artificially jacked up home values to justify higher loan amounts.

Big Wall Street banks and investment firms that sold pools of mortgage-backed securities without fully disclosing the risk level to investors.

Credit-ratings agencies that gave gilded, unjustifiably high ratings to the mortgage-backed securities.

Real estate agents so eager for a sale that they didn't inform prospective homebuyers of salient facts (such as a cracked foundation or neighborhood environmental issue).

Homebuyers who lied about their income to secure a loan for their dream home.

But tougher government regulations and oversight aren't the only things that are needed. Although many people in housing-related businesses are honest and principled, some clearly need to develop stronger moral fiber. Industry trade associations and individual firms should dust off their ethics policies to see if they are being followed or need revision. In dealing with others, how about following the golden rule?

The Federal Reserve, under Chairman Alan Greenspan, was grossly neglectful in failing to ramp up oversight of mortgage lending even after being prodded by Congress to do so. New Chairman Ben Bernanke seems determined to impose tougher oversight, but critics question whether he will go far enough.

Anything-goes mortgage lending practices of the Wild West sort should be tolerated no longer. Americans must keep heat on Washington by insisting that we've got no more time for the subprime slime.

A crude habit

Fri, 07 Mar 2008 04:39 CST

By JACK Z. SMITH

It was almost as startling as if entertainer Joan Rivers, a veteran of multiple face fresheners, had denounced cosmetic surgery.

Or as if Keith Richards, the Rolling Stones bad-boy guitarist, were suddenly conducting seminars on clean living.

But there it was, splashed across the news wires on Wednesday. President George W. Bush, a bosom buddy of Big Oil if ever there was one, uttered this straightforward pronouncement: "America's got to change its habits; we've got to get off oil."

This is the man who for years stubbornly opposed any meaningful increase in federal fuel economy standards until finally signing a bill, passed by Congress in December, that boosts mileage requirements about 40 percent by 2020.

Bush's remark came on the same day that oil prices closed at an all-time high of $104.52 a barrel in futures trading in New York. On Thursday, oil reached another record high, $105.97, before settling at $105.50.

On Monday, gasoline prices in the Fort Worth-Arlington area hit a record-high average of $3.07 a gallon for regular unleaded. Nationally, the average was $3.16. Diesel fuel, used to transport most goods, was at $3.67.

Energy prices are raising costs for everything from cornbread to airline tickets. There's serious talk of $3.40 gas this spring, and $4 fuel further down the line.

The media have made much of the fact that U.S. oil companies have been achieving record profits, topped by $40.6 billion in earnings by Exxon Mobil in 2007. But another trend probably should be even more troubling to Americans: The U.S. is losing much of its historic control over the world's oil supplies at a time when we import about 60 percent of the oil we consume.

More than 75 percent of the world's oil is owned and controlled by governments through their national oil companies, rather than private-sector giants such as ExxonMobil and Chevron. The national energy concerns in oil-rich nations such as Saudi Arabia, Nigeria and Venezuela are driving harder bargains in terms of providing access to their oil and demanding bigger shares of production revenues.

The nationals' power was evidenced this week. The Organization of Petroleum Exporting Countries, the cartel that includes Saudi Arabia, snubbed Bush's plea to ramp up production and thereby put a damper on prices.

OPEC said oil supplies are adequate. It contended that much of the price increase has been caused by speculators and U.S. economic "mismanagement." Investors have flocked to commodities such as oil as a hedge against inflation and as a reaction to the weak U.S. dollar.

America, the world's biggest oil consumer, also has waning control over global crude supplies and prices for another reason: Fast-growing developing countries such as China and India are gobbling up ever-growing quantities of the black gold, with many of their citizens buying autos for the first time.

Fortunately, many Americans are changing their energy habits. February's sales of Chevrolet full-size pickups were down 29 percent, but sales of the compact Ford Focus were up 11 percent.

We should seek to boost domestic oil and natural gas production. But we also must heighten efforts to conserve energy on fronts ranging from autos to home heating and cooling. We must accelerate development of wind, solar, clean coal and nuclear power. We should embrace strong family planning programs that slow global population growth and thus lessen energy demand.

Some exciting progress is being made. For example, there are some real advances in developing plug-in hybrid and totally electric cars.

Even Bush, in the waning days of his disappointing administration, realizes that we've eventually "got to get off oil." That's progress right there, isn't it?

Gas money Fort Worth

Fri, 29 Feb 2008 04:40 CST

By JACK Z. SMITH

Fort Worth Mayor Mike Moncrief has long touted the virtues of the Barnett Shale natural-gas drilling boom. But as a veteran oil and gas producer, he knows its limits.

"The Barnett Shale, while it is a blessing, is not the panacea many people think it is," he said Tuesday at a City Council work session. "As production declines, so does the revenue stream. It is not an endless stream."

The Barnett's limitations were outlined in sobering detail by Susan Alanis, the city's acting planning and development director.

The good news is that, by the city's own conservative estimates, it will receive $1.058 billion from lease bonuses and royalties for wells drilled under city properties such as parks and airports. That slightly exceeds the city's annual operating budget and is about $100 million higher than previously estimated.

But taxpayers who equate the gas money to winning the lottery should realize that the $1.058 billion is to percolate into city coffers over 25 years. That averages only about $42 million a year, or 4 percent of the current city operating budget.

Furthermore, the city can't spend the Barnett revenues just any way it wants, which won't please taxpayers who've been asking, "Why aren't we using all that gas money to fix our roads?"

Most of it can't be used for roads because of federal, state, and city restrictions on its use. Much must be plowed back into improvements to properties drilled under, or similar properties, as in the case of city parks that have gotten state or federal grants.

The council has further restricted the near-term use of the money by wisely adopting a policy setting aside a sizable chunk for a trust fund that can provide significant long-term funding for capital improvement projects in the years after the Barnett production has petered out. A disciplined investment program could leave the Fort Worth Permanent Fund with a $350 million balance by 2035, city officials estimate.

Only $49.8 million of the $1.058 billion in projected revenues over the next 25 years is unrestricted and available for road projects. That's less than 5 percent. But that shouldn't be cause for resident hand-wringing. Here's why not:

The gas money will enable the city to make wonderful and otherwise probably unaffordable improvements to Lake Worth, the Fort Worth Nature Center, many city parks and perhaps Alliance, Meacham and Spinks airports.

As an example, Barnett dollars should enable the long-needed dredging of Lake Worth and major improvements to adjacent parkland, turning an underused asset into a recreational mecca. That in turn would encourage attractive residential and commercial development in areas surrounding the lake, thus expanding the city's tax base.

Some gas-money benefits will be indirect and subtle. The revenues should moderately reduce financial pressures on the general fund budget, thereby increasing the city's chances that it can either avoid future property tax rate increases or continue whittling the rate down. (It's dropped from 97.35 cents to 85.5 cents per $100 taxable value over the past 14 years -- a 12.2 percent reduction.)

The gas revenues could reduce the amount that the city will need to borrow through future bond programs, or enable a greater portion of bond money to go for road projects.

Bottom-line, Moncrief's assessment is right on the nose: The Barnett Shale boom is a financial blessing for City Hall, but far from a cure-all.

Lip service? Taxes

Fri, 22 Feb 2008 05:09 CST

By JACK Z. SMITH

In 1988, George H.W. Bush uttered one of the most famous campaign promises in American political history: "Read my lips: no new taxes."

On Sunday, the expected 2008 Republican presidential nominee, Sen. John McCain of Arizona, made his own rambling "no new taxes" pledge when questioned by George Stephanopoulos on ABC's This Week. McCain also urged simplifying the federal tax code.

As a follow-up, clarifying question, Stephanopoulos asked, "But under no circumstances would you increase taxes?"

"No," was McCain's curt response, which required minimal lip reading.

Bush's no-new-taxes vow at the Republican National Convention helped him defeat Democrat Michael Dukakis in 1988. But Bush fudged on the promise in 1990, supporting major legislation that included tax increases.

It was a fiscally responsible act by Bush, because the legislation put the budget on sounder footing and helped pave the way for eventual budget surpluses in the late 1990s. But the broken promise contributed to Bush's loss to Bill Clinton in 1992.

So what are the odds that McCain, if elected president in November, would break his no-new-taxes pledge? Pretty high, I would venture.

It's going to be very difficult for the next president, regardless of who that is, to avoid increasing taxes at least moderately in the next four years.

Voters should view suspiciously any no-new-taxes mantra because exiting President George W. Bush will be leaving the government in a shaky financial position.

If you don't believe me, just look at Bush's proposed $3.1 trillion budget for fiscal 2009.

It forecasts near-record deficits of $410 billion this year and $407 billion for 2009 (eclipsed only by the record $413 billion deficit in 2004). Critics say that Bush's budget assumptions are overly rosy and that deficits could top $500 billion.

The deficits would be considerably higher but for Congress and Bush raiding the Social Security trust funds to help cover federal expenditures.

Bush is obsessed with tax cuts, especially for wealthy people who need them least. McCain, who earlier voted against various Bush tax cuts, now favors making them permanent. Most expire in 2010.

Subscribers to supply-side economics contend that lowering taxes will expand the economy and thereby boost government revenues. If so, why does Bush's proposed 2009 budget forecast that extending the tax cuts five years would reduce federal revenues by $635 billion and that extending them 10 years would shrink revenues by $2 trillion (as compared to letting the cuts expire)?

While relentlessly crusading for tax cuts, Bush also has been a big spender, whether for an unnecessary war in Iraq or a new Medicare prescription drug program.

A combination of reasonable tax increases and tighter spending controls will be needed in coming years. If a substantial portion of the Bush tax cuts aren't allowed to expire, that will increase the prospects of deep cuts in government services (especially for the poor), continued large budget deficits and a sustained failure to address the long-term funding shortfalls facing Social Security and Medicare.

Is that what a President McCain would settle for if he were determined to maintain his no-new-taxes pledge at all costs? Or would McCain, when confronted with harsh budget realities, break his no-new-taxes promise as George H.W. Bush did in 1990?

Either way, it's not a pretty picture.

ONLINE

To see Sen. John McCain's statement on YouTube: http://tinyurl.com/2che59

Let's hope that this will be the road not taken

Fri, 15 Feb 2008 05:06 CST

By JACK Z. SMITH

Members of the North Fort Worth Alliance are understandably frustrated with congested road conditions in their fast-growing neighborhoods.

But they shouldn't let that override common sense. With their latest maneuver, they might be cutting off their nose to spite their face.

Colleen Demel, the alliance's executive director, told the Fort Worth City Council on Tuesday night that the coalition of 19 neighborhoods would oppose the city's $150 million, transportation-focused bond program because it included $10.2 million for three bridges in the Trinity Uptown project.

The alliance outlined its stance in a letter that Demel wrote to Mayor Mike Moncrief and other council members.

"Adequate streets and roads along with fire, police and emergency medical services are a city's responsibilities to its residents. Meet those basic needs citywide before talking about creating a legacy," it said.

The "legacy" reference was to Trinity Uptown, the controversial $519 million flood control, economic redevelopment and recreational enhancement project that would transform a drab industrial area on the city's near north side.

I greatly sympathize with residents in far north Fort Worth who drive clogged roads. I admire the alliance members for being involved residents. But they're dead wrong in opposing the bond program and focusing their wrath on the Uptown bridges.

Here's why:

The bond program, to be voted on May 10, is focused on putting money where the needs are greatest. More than half the money -- $81 million -- would go to arterial roads, four-lane and six-lane roads that draw lots of traffic. The heaviest funding for arterials is in north Fort Worth, north of Loop 820 -- in areas where many North Fort Worth Alliance members travel.

If the bond program is defeated, residents of the alliance's 19 neighborhoods can expect further delays in road improvements and escalating gridlock. Would they deem that a victory?

There's no reason to get in a tizzy over $10.2 million being allocated for the Uptown bridges. That's only 6.8 percent of the $150 million bond program, or less than $1 of every $14.

I'm excited about the fact that Uptown could become another wonderful "legacy" of Fort Worth's impressive efforts to revitalize its downtown and older central-city neighborhoods. By the way, local money put into the bridges would leverage $51 million in state and federal grant money for them, according to Randle Harwood, the city's Trinity River Vision director.

When I telephoned Demel on Wednesday, she told me that the North Fort Worth Alliance has agreed at least to consider a plea by Moncrief that it reverse course and back the bond program.

"I will take it back to our executive board and we will discuss it," she said. The board meets Saturday.

That support is needed. There are "roughly 20,000 homes" within the alliance's 19 neighborhoods, Demel said.

The bond program would benefit far north Fort Worth more than any other area. Residents throughout the city will cast a straight for-or-against vote on the entire $150 million package.

Many Fort Worth residents (myself included) didn't get all our desired street projects put in it. Some (by no means limited to those in far north Fort Worth) are upset about the proposed funding for Uptown bridges. But they'd be foolish to vote against the bond program just because they dislike one or two aspects of it.

A sports analogy is in order: Would you turn down Super Bowl tickets on the 40-yard line just because what you really, really wanted was seats on the 50?

Me neither.