Jewish World Review May 11, 2000 /6 Iyar, 5760
The Bush campaign calculates that enough Americans are stock market-wise and thinking long-term that this year's volatility won't scare voters into the arms of Vice President Al Gore.
Gore, of course, is sounding alarms about Bush's proposal, calling it "stock market roulette" and a "secret plan" that Gore nevertheless calculated would sap the projected federal budget surplus by $850 billion over 10 years.
Who's right? Between Social Security, taxes and budgets, this has become a presidential campaign that will require a high policy-wonk quotient among journalists trying to report it and voters trying to judge the candidates.
Is Bush's tax cut proposal "risky" and "irresponsible," as Gore claims, or entirely affordable and beneficial, as Bush asserts? Is the Social Security system "not broke," as Gore asserts, or in dire need of modernization, as Bush claims?
These are not easy questions to answer, and they get more difficult the deeper one examines them. But they are certainly big matters worth debating in a presidential campaign. And they surely beat a campaign based on personal attack.
Bush got two boosts last week. The first came from Democratic Sens. Daniel Patrick Moynihan, N.Y., and Bob Kerrey, Neb., who backed Bush's idea of private savings accounts to bolster Social Security and urged Gore to reconsider them.
The other break derived, ironically, from the roaring Clinton-Gore economy, which enabled Bush to assert that the 10-year non-Social Security budget surplus would be $1.8 trillion, double previous estimates -- and big enough to contain his $1.3 trillion tax cut plus $500 billion in new spending initiatives.
Gore, though, refused to concede on either point. He insisted that when workers invest part of their Social Security taxes in the stock market, the revenue lost will have to be made up by lowering Social Security benefits, raising other taxes or tapping the non-Social Security surplus.
The $850 billion figure he cited is one estimate of the cost of allowing workers to invest 16 percent of their Social Security taxes in private markets. That's the portion contained in many privatization proposals, although Bush is not expected to endorse any specific plan.
On top of this revenue loss, Gore's campaign insists -- on the basis of a study by the union-backed group Citizens for Tax Justice -- that Bush's tax cut would cost $2.2 trillion over 10 years, not $1.3 trillion, as Bush calculates.
As an alternative, Gore is proposing a much smaller tax cut -- $250 billion -- and is promising to reserve about $750 billion to extend the solvency of Social Security and gradually pay down the national debt of $4 trillion.
Gore, in a way, is the traditionalist -- even conservative -- in this race, promising old-style fiscal responsibility, paying down debt and no reform of the Social Security system.
He's a traditional liberal, though, in proposing nearly $1 trillion in new spending, including $430 billion over 10 years for a Medicare prescription drug benefit, $150 billion for health insurance for the poor and $115 billion for education programs. Bush's new spending is much lower.
Polls show that most voters prefer a debt pay-down and investments in health and education rather than a tax cut -- an advantage for Gore.
Bush, on the other hand, is a reformer on Social Security and, at bottom, a Ronald Reagan-style supply-sider on taxes, promising to lower marginal rates to spur enterprise. Bush plans to cut some domestic spending but hasn't yet revealed how much.
Bush's economic aides claim the difference between Bush and Gore is that the vice president wants to pay down the $4 trillion "debt held by the public," whereas Bush proposes to reduce the $7-trillion long-term unfunded liability of Social Security through private investments.
Polls indicate that about 60 percent of the public believe Social Security needs "major changes," and between 55 percent and 75 percent support some private investment. That's an advantage for Bush.
Bush will argue in a speech this week that investors in the stock market have earned an average 8-percent return on their money since before the Great Depression, whereas Social Security revenues return 1.1-percent interest.
Still, with the Dow and Nasdaq down by nearly 10 percent this year, it will be easy for Gore to say that what Bush proposes is "risky." To win this election, Bush needs to push American voters up the economic education
05/09/00: Bush Could Score With Charge That Gore's Too Partisan