WASHINGTON, Oct 12, 2004 (The Dallas Morning News - Knight Ridder/Tribune News Service via COMTEX) --
For many voters, Wednesday night's final presidential debate in Tempe, Ariz., will boil down to one issue: Jobs.
And that, says Wells Fargo Bank economist Sung Won Sohn, is because there are few of them to go around. "Job growth has been way sub par compared to previous economic recoveries," he says.
But whether its jobs, health care, Social Security or the budget deficit, voters will have to decide from two distinctly different plans.
President Bush favors a free-market approach, one embodied in his "ownership society."
Democratic nominee John Kerry sees a greater role for government in helping workers and families.
In December 2000 - the month before Bush took office - government statistics show 132.4 million Americans with jobs. Last month, 131.6 million were reporting for work.
"The line from Democrats will be that this is the first president since Herbert Hoover to have fewer people employed than when he started office," said David Wyss, chief economist at Standard & Poor's Inc.
Bush is likely to respond as he has on the campaign trail that his tax cuts are working and that the economy is starting to produce quality jobs with benefits Americans want: Good wages and health insurance.
Indeed, access to health care and the rising cost of remaining insured are important to both workers and businesses. A survey by Hewitt Associates found 2004 health care costs are up 15.5 percent in Dallas.
It just continues to be a problem," said Dan Blankenburg, a political analyst for the National Federation of Independent Business.
And there are plenty of other big issues: The projected insolvency of Social Security and Medicare, the budget deficit, tax cuts and legal reforms, to name a few.
Gregg Valliere, an analyst at Schwab Soundview Capital Markets, said that while the candidates have distinct ideologies, both would face difficulties in office. Kerry would be up against a Republican-dominated Congress. Bush would be frustrated by a Senate where the GOP lacks 60 votes to cut off a filibuster.
"Both these guys would be unlikely to get a lot done," he says.
Here's a look at where the candidates stand on:
Jobs and economic growth
Issue: Since the recovery began in November 2001, the economy has added only 1.2 million jobs.
With weak job growth and some positions being moved to cheap overseas labor, workers are anxious about when the economy will begin creating abundant jobs with good wages and benefits.
Bush:
Four tax cuts have helped buffer the effects of a recession, corporate fraud and the Sept. 11 terrorist attacks, positioning the economy for a more robust expansion.
Bush wants to make more of his tax cuts permanent. Some proposals include simplifying the tax code; increasing investments in low-income communities; expanding trade and increasing domestic energy production by building refineries; constructing an Alaska natural gas pipeline and encouraging exploration in the Gulf of Mexico and Alaska's Arctic National Wildlife Refuge.
Kerry:
Proposes to eliminate tax breaks for companies that locate jobs overseas while providing a corporate tax cut to 99 percent of taxpaying corporations. He wants to enact a jobs tax credit that would cut the employer portion of the Social Security tax for employers that create new jobs.
Kerry proposes to make the middle-class tax cuts permanent. And he proposes to raise taxes on the top 2 percent of taxpayers and close corporate tax loopholes to pay for tax cuts for health, childcare and education.
Health care
Issue: Health care premiums paid by employers are up 11.2 percent this year, capping a 59 percent increase since 2000, according to the Kaiser Family Foundation. And with 45 million Americans lacking coverage, both cost and access to health care are campaign issues.
Employers have responded by shifting more costs to workers, cutting benefits and shifting work to jobs without coverage. The cost of health care also is listed as a reason why employers have been slow to add new workers during the recovery.
Bush: Using a free-market approach, the president would extend tax credits to small businesses and employees to set up health savings accounts, with low-income families getting a direct $1,000 contribution and a $2,000 refundable tax credit.
The proposal includes association health plans, which would allow small businesses and civic groups to band together to negotiate coverage. It also includes a two-year effort to enroll more eligible low-income children in Medicaid.
Kerry: The senator has a more ambitious and costly proposal that would enroll more uninsured children, parents and single adults in Medicaid. Small businesses, workers ages 55 to 64 and those between jobs would be enrolled in the same plans offered to federal employees. Workers between jobs would get subsidies to buy insurance.
Employers could participate in a reinsurance pool in which the government would pay a portion of catastrophic costs. Businesses would be required to return the savings to workers and participate in disease management programs.
Kerry plans to pay for his plan by raising taxes upper-income taxpayers.
Budget deficit
Issue: Chronic federal budget deficits have returned. The deficit for the 2004 fiscal year ended Oct. 1 is expected to be $445 billion; deficits are expected to narrow but still be about $230 billion annually in 2009.
Experts say the budget surplus of the 1990s vanished for three reasons: Increased federal spending, the recession and tax cuts. Economists said deficits could force up interest rates and leave the government with fewer resources to pay for the retirement of the baby boom generation.
Bush: Proposes new budget enforcement legislation to restrain the growth in spending and offset initiatives to expand entitlement programs. He also wants a Constitutional amendment, giving the president a line-item veto to eliminate appropriations, new entitlement spending and tax benefits.
Kerry: Promises to cut the deficit in half in four years by restraining the growth of spending, paying for all new proposals and eliminating corporate subsidies.
Social Security
Issue: Social Security is expected to come under stress in 2008 when the first wave of the 77-million baby boom generation takes early retirement at age 62. By 2018, the system will begin paying out more in benefits than it takes in and will become insolvent by 2042.
Experts contend the problem needs immediate attention and will ultimately require painful choices, including higher taxes and cuts in benefits.
Bush: Promises not to cut benefits for near or current retirees, but makes no such commitment to younger workers. As he did during his 2000 presidential campaign, Bush calls for private accounts in which a portion of workers' Social Security taxes would be diverted into market investments.
Bush has not said how he would pay for current Social Security benefits when funds are diverted to private accounts, a transition experts say could cost $2 trillion or more.
Kerry: Asserting that Social Security's problems are manageable, Kerry says much of the shortfall can be overcome by economic growth and promises to "jump start" the economy. An expanding economy would generate more payroll taxes to pay for benefits.
He also pledges to cut the deficit in half in four years, which experts said would give the government more flexibility to borrow money to pay Social Security benefits.
As for the tough choices, Kerry said he would not raise Social Security taxes, the retirement age or cut benefits for people who rely on the program. He has also ruled out private accounts. |
