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Jewish World Review Dec. 7, 1999 /28 Kislev, 5760

Morton Kondracke

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Election pits Bush cuts vs. Medicare boost -- TEXAS GOV. GEORGE W. BUSH'S big tax speech Wednesday drew a bold line between Republicans and Democrats for the 2000 election and eliminated any possibility of a long-term budget deal next year between the Clinton administration and Congress.

There was little chance of a grand compromise in an election year anyway -- though Clinton professes to hope for one -- but Bush's proposal to devote practically the entire non-Social Security surplus to tax cuts reduced it to zero.

When President Clinton signed the fiscal 2000 budget bill this week, he cited a list of "challenges unmet" that aides said would reappear in his last State of the Union address in January.

The items included a hate-crimes bill, extension of the life of the Social Security Trust Fund, patients' rights, Medicare reform and a prescription-drug benefit, and a minimum-wage hike.

But Bush's proposal guarantees that tax cuts will be the main policy initiative of Republicans next year. Clinton, Vice President Al Gore and congressional Democrats want Medicare expansion as their top item. There isn't enough money for both.

Conceivably, there could be agreement on second-tier issues like the minimum wage and patients' rights. There has to be a one-year budget deal to keep the government running.

But on Social Security reform, Medicare and taxes? Fuggedaboudit. Those will be -- and properly so -- what the 2000 campaign will be all about.

Bush proposed a $483 billion tax cut over the five years starting in fiscal 2002, using up all but $103 billion of an anticipated $586 billion surplus. The tax cut Republicans passed this year, which Clinton vetoed and Democrats vilified, would have cost only $351.9 billion over those same five years. The Bush plan unveiled in Iowa does look more "compassionate" than the congressional GOP plan because it skews rate cuts toward the lower end of the income spectrum and contains no capital-gains reductions.

Bush aides said that half the benefits in Bush's plan will go to lower-income families by reducing their tax rates from 15 percent to 10 percent and doubling the child tax credit.

A third of the money would go to the middle class and just a sixth to higher-income taxpayers by reducing the top rate from 39.6 percent to 36 percent.

Despite such progressivity, Democrats surely will attack the Bush plan because it will give millionaires a much bigger break in dollar terms than a larger percentage cut will for middle-class persons.

The Bush campaign anticipates an even stronger Democratic blast over what aides jokingly refer to as "EMAWKI" -- shorthand for Clinton adviser James Carville's charge that the GOP wants to "eliminate Medicare as we know it."

Gore, for instance, says that keeping the Medicare system solvent and giving seniors a prescription-drug benefit will cost around $200 billion over five years -- money that wouldn't be available with the Bush tax cuts.

Gore's Democratic rival, former New Jersey Sen. Bill Bradley wants to spend about $325 billion over five years to finance health insurance for the uninsured -- another impossibility under Bush's plan.

Democrats surely will also argue that Bush can't pay for his own proposed tax cuts, defense increases and education improvements without overspending the non-Social Security surplus and dipping into Social Security revenues, which he and other Republicans have pledged not to do.

The Congressional Budget Office estimated earlier this year that if Congress did not hold to budget caps established in 1997 and allowed federal programs to grow at the rate of inflation, there would be practically no budget surplus whatsoever.

The budget Congress passed this year and Clinton just signed did break the caps, but the Bush budget is based on the assumption that spending will be held in check in future years -- a risky proposition.

"Risky" is the term that Democrats persistently apply to GOP tax cuts. Bush responded by declaring that it's not "risky to let taxpayers keep more of their own money. What is risky is when politicians are given charge of a surplus. There is a strong temptation to spend it."

As Bush described it, in allocating the surplus, he chose "the creation of wealth over the care and feeding of government."

Bush also anticipated the charge that tax cuts spell a return to Reagan-era deficits and economic instability. To the contrary, he said, the present prosperity derives precisely from Reagan's 1981 tax cuts and the burst of investment it set loose.

Polling this year does not suggest that the public is particularly supportive of tax cuts, preferring a pay-down of federal debt and investment in education and health care. Bush, however, is a more attractive salesman of GOP programs than congressional Republicans. Moreover, his tax plan itself is more populist than theirs.

Bush favors market-based Medicare reforms, partially privatizing Social Security, and offering options for the uninsured through the states, not the federal government -- all ideas that top Democrats detest.

All those, plus his tax plan, will give the voters a big set of choices next November. People who say the parties are carbon copies of each other are just wrong.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.


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©1999, NEA