Playing whose budget is better
By SARA FRITZ and TIM NICKENS
© St. Petersburg Times, published September 10, 2000
WASHINGTON -- Times certainly have changed since Ronald Reagan won the presidency in 1980 with a budget plan that did not balance. This year, both presidential contenders are so determined to prove their figures add up right that they sometimes sound more like accountants than politicians.
Most everywhere Republican George W. Bush goes these days, he carries four one-dollar bills that he uses to explain his economic plan. The money, he says, represents the $4.6- trillion surplus the federal government expects over the next 10 years.
Two bills symbolize the $2.4-trillion from the Social Security surplus that he would set aside to protect the entitlement and pay down debt.
The third bill represents the additional money he would spend in areas such as education, national defense and a prescription drug benefit for seniors.
And the last dollar -- the one that got the most applause at rallies in Illinois, Michigan and Indiana last week -- represents $1.3-trillion in tax cuts.
Although Bush's math sounds plausible, Democrat Al Gore doesn't buy it. In an effort to expose what he called the "cross-your-fingers economics" of his opponent, the vice president released his own detailed economic plan last week -- all 191 pages.
Both candidates also bought full-page newspaper advertisements during the week to sell the details of their economic plans. Bush's ad boasted his plan had been endorsed by six Nobel laureates; Gore's ad attacked Bush's plan on grounds that it promised more deficits and tax cuts for the wealthy.
These developments reflect an escalating economic debate between Gore and Bush based on numbers and projections that is strangely reminiscent of the 1992 campaign of third party candidate Ross Perot, whose reliance on charts and graphs inexplicably amused an entire nation.
But this is not fun and games for Bush and Gore. How voters assess their ability to manage the country's prosperity could turn the election.
The irony is that this battle for budgeting precision is being waged at a time when the nation is enjoying budget surpluses -- whereas Reagan sold voters on his unrealistic budget plan at a time when they were concerned about the rising deficits.
It is also highly unusual to see Gore, the Democrat, casting himself as the fiscal conservative -- a role that traditionally has been claimed by Republicans.
Why are these candidates so focused on the numbers?
Pollsters say voters are more interested this year than in the past about the details of the economic plans being discussed in the campaign because they fear the current prosperity could be spoiled if government takes the wrong steps.
"American voters are willing to take risks in bad times, but not in good times," observes Democratic pollster Celinda Lake. "Times are good, and there is a lot of voter anxiety."
What these anxious voters seem to want most is a pledge from their new president that he will pay off the national debt. Yet while both Gore and Bush have promised to do so, it is not clear that the economic plan of either candidate would actually accomplish that goal.
So far, however, Gore seems to be winning this particular argument. Polls show the vice president has succeeded in persuading many voters that the Republican's proposed massive tax cuts are too risky.
The vice president contends that Bush's proposed tax cuts would drain $2-trillion from the surplus over the next 10 years. He estimates that Bush's spending proposals would cost $750-billion and that Bush's plan to privatize Social Security would add another $1.2-trillion.
"The result is that little -- if any -- of the surplus is left to pay down the debt," says Gore, referring to the Bush plan. "In the end, the difference between the two plans is clear: Under the Gore-Lieberman plan, the debt is steadily paid down to zero. Under the Bush-Cheney plan, America would be left with debts of at least $2.8-trillion."
Using current economic projections, Gore insists his own plan would produce a balanced budget every year for the next decade and eliminate the national debt by 2012. But just in case current economic projections prove too optimistic, Gore would set aside another $300-billion in a reserve fund as a kind of fail-safe mechanism to prevent a return to deficit spending.
"Simply put," Gore says, "we will place $1 out of every $6 of budget surplus into a reserve -- unspent, unallocated and uncommitted."
For a while, Bush just shrugged off Gore's criticism of his spending plan. But now that the race has tightened in the aftermath of the political conventions, Bush can no longer afford to ignore it.
So last week he began to fight back with a flurry of symbols and a mountain of paperwork.
He used his dollar bills or his fingers to demonstrate how he would allocate the surplus. In every city, Bush also is meeting a family drafted by the campaign to illustrate how everyone would pay less taxes under his proposal.
At the peach festival in Romeo, Mich., it was a law enforcement officer's family who would get $1,600 in tax relief. In Allentown, Pa., it was a former paramedic's family who would save $3,500. In Indianapolis, it was a UPS driver's family who would save $1,775.
In each case, the Bush campaign figured the families would get little or nothing from Gore's smaller, targeted tax cuts aimed at specific areas such as education and health care. These stories are designed to counter Gore's claims that the Republican's tax cuts benefit the wealthy.
For his part, Gore insists his own proposed tax cuts are "targeted" to help only the middle class -- not the wealthy. In fact, he says his plan would bring the typical middle-class family's tax burden to the lowest level in 50 years.
"Under the tax plan the other side has proposed," Gore said last Wednesday, "for every $10 that goes to the wealthiest 1 percent, middle-class families would get one dime. And lower-income families would get one penny. It gives the most to those who need it the least -- and the least to those who need it the most. And that's just wrong."
Although Bush says he has an extra $265-billion built into his plan -- just in case his projections are wrong -- Gore supporters note that cushion would be derived primarily from savings achieved through government reforms, many of which would be difficult to enact.
Bush's plan also does not take into account the costs related to his proposal to let younger workers divert a portion of their payroll taxes from Social Security into private investment accounts. Gore contends that these costs will add up to billions and billions of dollars.
Bush's advisers acknowledge that at some point privatization would require spending additional federal money for what is known as "transition costs," but not until after a 10-year study period.
Likewise, Bush disputes Gore's numbers.
Bush adviser John Cogan, a senior fellow at the Hoover Institution and associate deputy director of the Office of Management and Budget in the Reagan years, insists Gore's plan would spend $900-billion more than the projected surplus. He cited three primary areas of dispute with the vice president:
Gore estimates his retirement savings plan, which would offer federal matching money for new investment accounts separate from Social Security, would cost $200-billion over 10 years. The Republican staff of the Senate budget committee says it would be about $750-billion over 10 years by estimating that many more workers would take advantage of the program than Gore calculates.
Gore says his proposal for universal preschool would cost $50-billion over 10 years. The Republicans estimate twice as much.
Gore says his plan to beef up education for the handicapped will cost $20-billion over 10 years. The Republicans estimate it will be four times as expensive.
Cogan also knocked Gore's claim that he has built in a rainy day fund of $300-billion."What you'll find is they have no cushion at all," he said.
Although Bush has been slow to get deeply involved in this debate, analysts say it is not too late for him to convince the voters that his plan is every bit as sound -- if not more -- than Gore's.
While defending his own plan, Bush is also trying to revive the traditional GOP argument against Democrats, saying that Gore's plan would only preserve a bloated federal government.
"It says "Keep sending all your money to Washington, and let me spend it for you,' " Bush said, referring to his opponent's economic plan. "And spend he can. Let me tell you, that man knows how to spend money!"
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