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NEWS ANALYSIS

Old Way vs. Bold Way at Crux of Surplus Debate

December 13, 1999|RONALD BROWNSTEIN | TIMES POLITICAL WRITER

"The key question is how do you keep the prosperity going," Gore said in last week's interview. "I'm all in favor of social spending. I've proposed a good bit more of it in the budget I've put out. But it's only one arrow in the quiver, and economic growth is the most important means for providing . . . opportunity."

At times, the two rivals differ more in degree than kind. Gore has pledged to keep the budget in balance every year if elected; Bradley hasn't made such an explicit promise, but aides say he has constructed his agenda on the assumption that he would too.

Bradley has said he won't rule out a tax increase to pay for his health care plan if the surplus proves insufficient. But he says he has no plans to raise taxes. Gore has been somewhat more emphatic in renouncing higher taxes--"I do rule out tax increases in anything that approximates our current economic circumstances," he says--but he has resisted a read-my-lips pledge never to raise taxes under any circumstances.

The biggest difference may be that Bradley appears more willing to make commitments that could expose him to greater risk of a future fiscal shortfall.

Gore, like Clinton, has proposed a long list of new programs, but the vast majority of them are of modest size. On paper, at least, that leaves him with enough to allocate about $250 billion from the anticipated surplus toward bolstering Medicare--whose rising cost is expected to strain the federal budget as baby boomers retire.

Bradley's health care plan, by contrast, is so large that it would either consume most of the surplus (by his estimate) or more than the total anticipated surplus (by the calculation of one critical study), leaving little or no extra funds for Medicare.

Gore maintains that launching such an expensive new program would virtually guarantee future deficits or tax hikes, especially as Medicare costs rise. Bradley's camp insists the real difference is that the former New Jersey senator is more willing than Gore to target his priorities.

"Gore wants to have a significant tax cut [estimated at $217 billion over 10 years]; he wants to increase defense spending by $127 billion," says Anita Dunn, Bradley's communications director. "That would be a good argument to have in a Democratic primary: my priorities versus his priorities. What is dishonest is his attacking us for spending the surplus when he would spend it, and probably more."

Gore sharply disputes that characterization, noting that he has released 10-year figures showing how his proposals would fit into the anticipated surplus.

The GOP debate is developing along a parallel, but distinctly less confrontational, track. Mindful of his party's attraction to tax cuts, McCain has been careful to avoid directly suggesting that Bush's proposed reduction is too large (as Gore has done).

Instead, McCain is emphasizing more traditional notes of fiscal responsibility.

By questioning Bush's reliance on the surplus to pay for tax cuts, McCain has implicitly raised the specter of renewed budget deficits.

While the 10-year cost of Bush's tax plan has been estimated at $1.1 trillion to as much as $1.7 trillion, McCain has proposed a much more targeted $530-billion 10-year cut, with $230 billion coming from the anticipated surplus and the rest from "closing corporate tax loopholes and ending unnecessary spending subsidies." McCain would allocate the other $770 billion of the projected 10-year operating budget surplus to Social Security, Medicare and debt reduction.

The Republican fiscal debate isn't as starkly polarized as that of the Democrats. For one thing, while McCain is subtly implying that Bush's tax cut is too big, conservatives Gary Bauer and Steve Forbes are loudly insisting it's too small.

And Bush has no intention of ceding the high ground of fiscal responsibility: He's planning to propose a series of specific spending cuts next year.

It may, however, be a measure of McCain's success so far at challenging Bush's math that the Texas governor is delaying his release of those proposals until after the GOP primaries.

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