Kerry's Dueling Promises on Economy
Position on Reducing Deficit Conflicts With Campaign Commitments
The Bottom Line: A Washington Post analysis of tax cuts and spending plans proposed by Sen. John F. Kerry indicates that, over 10 years, the federal deficit would rise under a Kerry presidency by nearly the same as it would if Bush were reelected.
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, August 25, 2004; Page A08
... Absent congressional action, those tax cuts will expire by 2011. Bush wants to make them permanent, a step that the Treasury says would cost about $990 billion over the next 10 years. Kerry says he would extend the tax cuts that benefit the poor and middle class. But he would allow rates to rise for the wealthy, generating about $565 billion in extra revenue.
That money, however, would be quickly consumed by a health insurance proposal that Kerry says will cost an estimated $653 billion, as well as a $200 billion education initiative. Other campaign promises include aid to state governments; increased funding for veterans' health care, homeland security, energy research and conservation; and job-creation tax credits. They would add anywhere from $358 billion to $658 billion to the bottom line, according to a review of Kerry campaign material and a recent study by economists Eric M. Engen and Kevin A. Hassett at the conservative American Enterprise Institute.
Kerry says he would offset the cost of those programs with cuts in federal contracting, some agriculture subsidies and "out-of-control administrative costs" in the government. Other savings would come from a revamping of the student loan program, a commission to cut "corporate welfare" and the elimination of some missile-defense and other military weapons programs. Assuming all those savings materialize, the tax cut and spending proposals could still add as much as $1.3 trillion to the deficit over a decade.
That total is close to the bottom line of Bush's plan, which could add about $1.35 trillion to the deficit. Along with the $990 billion tax cut extension, Bush has proposed health care tax credits worth $120 billion, energy tax credits worth $175 billion and an assortment of other tax proposals.
Those parallel numbers have become an embarrassment to Democratic economists, who have tried -- but so far failed -- to convince the Kerry campaign that its rhetoric on fiscal rectitude should be matched by substance...
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