These two are nuts if they think they can sell this to the public.
Mr. Gephardt, of Missouri, and Howard Dean, former governor of Vermont, would repeal all tax cuts enacted in the last three years, including popular provisions like the one allowing a bigger child tax credit and another eliminating the "marriage penalty" under which some two-income couples paid more in taxes once they married and began filing jointly.
Democratic Candidates Differ on Economy, but Often Subtly
By EDMUND L. ANDREWS - New York Times
WASHINGTON, Dec. 28 — As the Democratic presidential candidates put the economy at the front and center of their campaigns, their differences boil down to a handful of issues: how much to roll back tax cuts, how much to raise spending, how much to reduce deficits and how to approach trade.
But the dividing lines are often subtle. The rival platforms can look like different sides of a Rubik's Cube: varying combinations of the same basic proposals.
All the candidates say they would repeal at least some of the tax cuts enacted during the Bush presidency, a high-risk stance that amounts to running for office on a pledge to raise taxes. The last Democratic presidential candidate to try that was Walter F. Mondale, who offered it in 1984 as part of a deficit reduction plan; he lost to President Ronald Reagan in a landslide.
Most of the candidates have also proposed large new health care programs, with Representative Richard A. Gephardt's the most ambitious, costing more than $200 billion a year. And none of the candidates have fully explained how to steer the federal budget back from the Bush-era deficits to the surpluses created in the Clinton administration.
"Everybody would like to protect tax cuts for the middle class, have universal health care and do dramatically better on the deficit," said Gene Sperling, a top economic adviser to President Bill Clinton who has advised a number of the current Democratic campaigners. "The first thing you learn when you do the numbers is that you can't do all that."
The principal differences among the candidates lie in their tone and philosophy toward business and free trade. The debate on those issues leaves them sounding at times as if they are far more divided over Mr. Clinton's economic legacy than President Bush's, which they uniformly condemn.
Mr. Clinton was the Democrat who gave his party a new message, declaring that "the era of big government is over" and preaching budget restraint, middle-class tax cuts and free trade.
The candidates who view themselves as heirs to Mr. Clinton's approach position themselves as more friendly to business and would retain much of Mr. Bush's tax cuts. They continue to support free-trade agreements despite fierce complaints by some manufacturers and labor unions of devastation wrought by cheap imports from China and brutal competition from Mexico.
"Are we going to build on the pro-growth, pro-jobs, fiscally responsible, strong-on-security, socially progressive legacy of Bill Clinton?" Senator Joseph I. Lieberman of Connecticut asked in a speech in New Hampshire this month. Or, he continued, "are we going to fall back on the failed policies and positions of the past?"
Others are calling for a new era of more activist government; the most concrete differences among these candidates are how much they would raise taxes and how much they would spend on programs like new health care initiatives.
Mr. Gephardt, of Missouri, and Howard Dean, former governor of Vermont, would repeal all tax cuts enacted in the last three years, including popular provisions like the one allowing a bigger child tax credit and another eliminating the "marriage penalty" under which some two-income couples paid more in taxes once they married and began filing jointly.
Mr. Gephardt and Dr. Dean have both offered expensive new health care plans, with Mr. Gephardt proposing to spend more than $2 trillion over 10 years, and Dr. Dean nearly $1 trillion. "While Bill Clinton said that the era of big government is over, I think we have to enter a new era for the Democratic Party," Dr. Dean declared not long ago.
The Democratic candidates are also polarized on the issue of trade, a decade after Mr. Clinton won Congressional approval of the North American Free Trade Agreement, with Mexico and Canada, and stood against his party's core supporters in organized labor.
Mr. Gephardt voted against Nafta, as well as Mr. Clinton's trade agreements with China and the World Trade Organization. He has vowed to renegotiate all those accords and has called for an "international minimum wage" that would raise workers' pay among exporting countries where cheap labor keeps costs low.
"Our trade policies remind me of the Red Sox sending Babe Ruth to the Yankees," Mr. Gephardt said recently. "They are bad deals that haunt us."
Two other candidates, Representative Dennis J. Kucinich of Ohio and the Rev. Al Sharpton, would go further still: they want all three agreements repealed.
As for Mr. Lieberman, John Kerry and Carol Moseley Braun, they all voted for free-trade deals in the Senate, and still defend them.
Dr. Dean has flipped back and forth on trade. Though a supporter of Nafta when he was governor of Vermont, he began his presidential campaign by proposing that the United States reduce trade barriers only with countries that adopt American standards on labor and the environment. He later retreated, saying that trading partners need adopt only basic standards like allowing collective bargaining.
But all the candidates, acknowledging the anger in many states about the loss of jobs to China and Mexico, say they would be much tougher in acting against "unfair" trade practices.
The national economic challenges that the current candidates survey are certainly as formidable as at any other time in recent years. Despite accelerating economic growth, unemployment remains stubbornly high. And the government's long-term fiscal outlook is ominous, with economists across the political spectrum warning that without drastic action, the wave of retiring baby boomers will bring such high costs for Social Security and Medicare that the nation will face crushing debt.
Many of his critics argue that Mr. Bush has helped create the long-term problems by cutting taxes at a time of high spending on the military and domestic security. But the Democratic candidates have themselves avoided laying out any long-term strategies. And though all have attacked the president for record deficits that could total $5 trillion over the next decade, none have offered more than hazy proposals for balancing the budget.
In any event, the various campaigns do differ substantially on how they would handle taxes. Mr. Gephardt and Dr. Dean would erase all of Mr. Bush's tax cuts, meaning a net tax increase that could exceed $2 trillion over 10 years. Mr. Gephardt would essentially spend all that money on a universal health care program that would cost about $214 billion in the first year alone. Dr. Dean has proposed a health care plan that would cost about $88 billion a year, or some $900 billion over 10 years.
The candidates whose stances more closely resemble Mr. Clinton's — Mr. Lieberman, Mr. Kerry, Senator John Edwards of North Carolina and Gen. Wesley K. Clark — would repeal tax cuts only for families earning more than about $200,000 a year. These candidates, who are positioning themselves as centrists, would reduce deficits a little more quickly than Dr. Dean or Mr. Gephardt, given the size of the Dean and Gephardt health care plans. But though they would raise about $1 trillion by scaling back the Bush tax cuts, they too would spend much of that on expanded health care and other programs.
Mr. Lieberman, meanwhile, would restructure all the tax rates, pushing up the top bracket to 39.6 percent and creating a "recapture" tax that would raise rates even higher for those families with incomes above $250,000. Campaign officials say the net result would be $1.1 trillion in additional tax revenue over 10 years, and a reduction in taxes for 98 percent of taxpayers.
Mr. Edwards as well would try to reduce taxes on middle-income households. His plan calls for about $160 billion in new tax benefits, including a tax credit against down payments on a home and lower taxes on dividends for middle-income households.
Mr. Kerry would retain the Bush tax cuts for people below the top brackets, and would add new benefits like a tax credit to offset college tuition costs.
Proposals to cut spending are in short supply. Mr. Edwards has called for a 10 percent reduction in federal workers. But he has not proposed to reduce spending by the full amount saved, and he would not impose the reduction on military programs and domestic security.
General Clark has outlined a plan to save $2.3 trillion over 10 years. But $600 billion of that would come from a reduction in costs for debt service, a calculation that assumes interest rates remain low. An additional $300 billion would come from closing corporate tax loopholes, though those could not be closed without big fights in Congress. And $225 billion would come from the perennial category of future savings: greater efficiency.
Dr. Dean has campaigned as a devout believer in fiscal discipline, but he has not set out any timetable for balancing the budget, saying only that he would put the government "on a path" toward balance.
Mr. Kerry has pledged to reduce the deficit in half by the end of a second presidential term. That may well be a realistic goal, but it is less ambitious than Mr. Bush's pledge to cut the deficit in half after only five years.
Given the constraints, experts say, all plans inevitably have a pie-in-the-sky quality.
"Whoever is president in 2005 is going to be staring at a gigantic budget hole, and filling that hole will be a monumental task," said Alan Blinder, a professor of economics at Princeton University who has advised both Dr. Dean and Mr. Kerry. "You have to make a distinction between someone's desires and what they can actually do."
Copyright 2003 The New York Times Company |
