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Candidates Will Be Weighed on Balance of Tax Cuts, Spending

Rampant bet-hedging suggests whoever wins will have to balance tax cuts and new spending more evenly than he now proposes.

September 04, 2000|RONALD BROWNSTEIN | Ronald Brownstein's column appears in this space every Monday

PORTLAND, Ore. — One way to measure the cost of George W. Bush's plan for an across-the-board cut in income tax rates is to look at the official estimate produced by the Congressional Joint Committee on Taxation: $1.3 trillion over the next decade.

The other way to measure the cost is to look at Al Gore's itinerary last week.

On Monday, in Tallahassee, Fla., Gore touted his $253-billion 10-year plan to provide prescription drugs for seniors and challenged Bush to match him. On Tuesday, in Albuquerque, Gore highlighted his $95-billion 10-year plan to guarantee health care to every child and millions of uninsured working adults, and again challenged Bush to match him. On Wednesday, Gore came here and dared Bush to match his plan to use more than $100 billion from the federal budget surplus to strengthen Medicare. If Gore was in the NFL, by the end of the week he might have been penalized 15 yards for taunting.

Bush is due to announce proposals Tuesday to reform Medicare and provide a prescription drug benefit. And he's already endorsed a modest tax credit to help the uninsured obtain health coverage. But Bush is devoting much less money to the uninsured than Gore and hasn't set aside any surplus money specifically for Medicare. (In the past, Bush has even argued that he doesn't need to devote any new funds to a prescription drug benefit because Medicare reform will produce enough offsetting savings, a view most experts consider impractical.) On education, the pattern is similar: Bush wants to increase federal education spending by about $45 billion in the next decade, Gore by nearly four times that much.

These disparities may represent the largest cost of Bush's tax plan: the political opportunities lost. Bush has committed more than two-thirds of the anticipated federal operating budget surplus to tax cuts, leaving him less than one-third for new spending; Gore would reverse the proportions. That means Bush can devote much less money than Gore to the domestic needs both sides identify as priorities. Even though each man is promising a balanced budget, voters still face a stark and familiar choice this fall: whether new spending or tax cuts are the best use of the expected windfall.

Indeed, throughout his campaign swing last week, Gore hammered at a theme likely to remain at the center of his argument through November: that the cost of Bush's tax cut undermines the Republican's promises to improve education, expand access to health care or help the needy. "If you are serious about doing things--investing in education, health care, a secure retirement--then you have to back up what you are saying with your budget," Gore insisted.

Bush, not surprisingly, resists that formulation. Wherever possible, he wants to shift the debate from resources to reform. Bush consistently argues that Gore's agenda is flawed because it pours new money into programs such as Social Security and Medicare without demanding fundamental reform. "They always want to frame the choice in terms of money," says one senior Bush advisor. "We want to argue that an unreformed system will not spend the money well. And Gore plays into that by not being willing to take on his constituencies to pursue reform."

Does Bush have a case? His indictment is strongest on programs for the elderly, where Gore's thinking itself shows signs of age. In his appearance here last week, the vice president lashed Bush for praising a bipartisan commission that proposed a series of cost-saving Medicare reforms, such as raising the eligibility age or nudging more seniors into managed care. But apart from a plan to increase price competition among health maintenance organizations participating in Medicare (which would save just $29 billion over the next decade), Gore has not endorsed any specific proposals to constrain Medicare's swelling costs.

Likewise, though Gore has proposed two significant expansions of Social Security benefits, he hasn't advanced any cost-saving measures. Gore, in fact, has promised massive infusions of general revenue to the Social Security system after 2010--a promise that could leave a future president scrambling for funds to meet other domestic needs.

On education, Bush's case isn't as strong. He pushed an ambitious school accountability agenda earlier than Gore and brandishes a sharper guillotine for schools that don't improve the performance of low-income children: Bush would provide parents in those schools federally funded vouchers they could use to move their kids to private schools. But Gore--spurred by the competition with Bush--has bulked up his own education reform proposals, including measures that would press local districts to impose tougher standards on teachers.

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