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CAMPAIGN '96

Clinton Assails Dole Fiscal Plan

Politics: U.S. can better afford his $110-billion tax-cut proposal than GOP presidential nominee's bid to slash $550 billion, president says.

August 18, 1996|SHERYL STOLBERG | TIMES STAFF WRITER

JACKSON, Wyo. — Promising to keep America on a path of responsible economic growth, President Clinton on Saturday faulted Republican opponent Bob Dole for proposing "indiscriminate" tax cuts that would reduce government revenues by five times as much as the president says the country can afford.

Clinton criticized Dole's $550-billion tax-cut proposal and promoted his own $110-billion plan in a weekly radio address that returned the president squarely to the political fray after a week of studiously avoiding it in favor of a hiking-and-golfing vacation here.

While he did not mention Dole by name, Clinton issued his harshest attack yet on his GOP opponent, a clear signal that the fall presidential campaign is in full swing now that the Republican convention in San Diego is over.

"Their plan would cut education. My plan would cut taxes while increasing investments in education," Clinton said. "Their plan would endanger the environment. My plan would cut taxes while continuing to clean up pollution and make our environment cleaner."

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Describing his economic program as consisting of a series of "targeted tax cuts," the president said his intention is to help working people pay for education, job training and child care, and to enable them to save for major medical expenses, their first home, and retirement.

The centerpiece of Dole's economic plan is a 15% across-the-board reduction in income tax rates that would affect every working American. Dole's approach, the president warned, would either "balloon the deficit" or require draconian reductions in Medicare, Medicaid and other government programs to balance the budget.

"My tax cut is limited in size; it's worth $110 billion. Theirs is five times as much--$550 billion," Clinton said. "We can afford ours. We can't afford theirs. . . ."

"In fact," the president continued, "millions of middle-class families with children in college, or with adults in educational programs, would actually get a bigger tax cut under my plan than under our opponents' plan."

Under the Clinton program, the White House said, a family earning $40,000 per year with two children, one a toddler and the other in elementary school, would save $1,000 a year in taxes. A family earning that same amount with one child in the first year of college would save $2,000.

The president also cited four major provisions of his economic program, which he has been promoting for several months:

* A $1,500 refundable tax credit for tuition in the first year of college, and another for the second year if the student earns at least a B average. The White House says the credit would make the average-cost community college free and provide a down payment for more expensive schools for families with annual incomes of up to $100,000.

* A $10,000 tuition tax deduction for education and training at any age. Families with annual incomes of up to $100,000 would be eligible for the deduction, which would provide a tax cut of $2,800 for a family in the 28% tax bracket. The president also advocates collapsing all federal training programs into a "G.I. Bill for America's workers," making the unemployed and underemployed eligible for grants of up to $2,600 a year to pursue their education.

* A $500-per-child tax credit for families with annual income of up to $75,000 a year and children younger than 13. The provision would provide tax relief to 19 million families with 37 million children, the White House said.

* Expanded individual retirement accounts. Clinton proposes to double the income limit for IRAs, making 20 million more families eligible for tax-deductible contributions. He would allow penalty-free withdrawals for education, first-home purchases and major medical expenses as well as retirement.

Dole's economic program, unveiled on the eve of last week's Republican convention, also calls for a $500-per-child tax credit and expanded IRAs, as well as a reduction in the tax on capital gains and a rollback of a 1993 tax hike on some Social Security recipients. But those reductions are overshadowed by the 15% across-the-board cut in income tax rates, which accounts for $411 billion of the plan's price tag of $550 billion.

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Dole campaign officials quickly dismissed the president's criticism.

"It's no surprise that a man who levied the largest tax increase in history would find fault with a plan that puts more money into the hands of Americans," said Dole spokeswoman Christina Martin. "Bill Clinton may think tax cuts are irresponsible, but Bob Dole knows tax cuts are key to giving American families control of their money, their lives and their dreams."

Noting that the combined rates of inflation, unemployment and mortgage interest are at a 28-year low, Clinton said his program is "clearly within our ability to balance the budget so we can continue to keep . . . interest rates down and the economy growing. That's very important if we want our families to be strong and successful."

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