I will not say I told you so :p


Kerry's deficit plan collides with campaign promises

By Jonathan Weisman
The Washington Post

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WASHINGTON — John Kerry's pledge to reduce record federal budget deficits is colliding with an obstacle that may be growing by the week: his campaign commitments.
A Washington Post review of Kerry's tax cuts and spending plans, in addition to interviews with campaign staff members and analyses by conservative and liberal experts, suggests that they could worsen the federal budget deficit by nearly as much as President Bush's agenda. If projected savings from unspecified cuts do not materialize, Kerry's pledges could outstrip those of the president, whom the Democrat repeatedly has accused of unprecedented fiscal recklessness.

"I wish Senator Kerry was providing a starker contrast," lamented Leonard Burman, a tax-policy analyst at the nonpartisan Urban Institute and former Treasury Department official in the Clinton administration. "The (Bush) policies with respect to the deficit are insane. They have to be reversed. But it will take presidential leadership to do it."

"You have to begin with the premise that the steps you need to take to reduce deficits are almost diametrically opposed to the steps you need to take to win elections," said Leon Panetta, President Clinton's first budget director. "You can cut spending and raise taxes, or you can cut taxes and raise spending."

Bush and Kerry have chosen to do the latter, and would leave in place all or some of the tax reductions enacted early in the Bush administration.

Those tax cuts are scheduled to expire by 2011. Bush wants to make them permanent, a step that the Treasury says would cost about $990 billion over 10 years. Kerry says he would extend tax cuts that benefit the poor and middle class. But he would allow rates to rise for the wealthy, generating about $565 billion in extra revenue.

That money, however, would be consumed quickly by a health-insurance proposal that Kerry says will cost an estimated $653 billion, as well as a $200 billion education initiative.

Other campaign promises include aid to state governments; increased funding for veterans' health care, homeland security, energy research and conservation; and job-creation tax credits. They would add $358 billion to $658 billion to the bottom line, according to a review of Kerry campaign material and a recent study by economists Eric Engen and Kevin Hassett at the conservative American Enterprise Institute.

Kerry says he would offset the cost of those programs by cutting federal contracting, some agriculture subsidies and "out-of-control administrative costs" in the government. Other savings would come from a revamping of the student-loan program, a commission to cut "corporate welfare" and the elimination of some missile-defense and other military-weapons programs.

Assuming all those savings materialize, the tax-cut and spending proposals still could add as much as $1.3 trillion to the deficit over a decade.

That total is close to the bottom line of Bush's plan, which could add about $1.35 trillion to the deficit. Along with the $990 billion tax-cut extension, Bush has proposed health-care tax credits worth $120 billion, energy tax credits worth $175 billion and other tax proposals.




Those parallel numbers have become an embarrassment to Democratic economists, who have tried — but failed — to convince the Kerry campaign that its rhetoric on fiscal rectitude should be matched by substance.

"The deficit issue has just not been salient enough for Kerry to justify the pain required to address it in a political campaign," said one Democratic economist who spoke on the condition of anonymity.

Some Democrats say they can defend Kerry's promises only by comparing them with Bush's first term, during which record surpluses turned to record deficits.

"We're faced with a choice between a president who has heavily mortgaged the country and who has no plan to deal with deficits except economic growth, versus an opponent who says he wants to do something about the deficit but whose numbers may not add up," Panetta said.

Bush campaign spokesman Terry Holt said Kerry's promises are far more profligate than the president's. By the Bush campaign's tabulations, Kerry would add $1.3 trillion to the national debt above where it would be under Bush's budget for the next 10 years.

Holt disputed the idea that a Kerry administration would find savings in a "corporate welfare commission" or dramatic cuts to government overhead, calling them "a bunch of budget gimmicks that don't add up."

Kerry campaign aides say such tabulations are unfair. Kerry has vowed that he would follow strict rules mandating that any new tax cut or spending plan be offset by revenue increases or equivalent spending cuts, said Gene Sperling, a Kerry economic adviser.

If savings cannot be found, programs will have to be jettisoned, Sperling said. "This is the first time I've ever seen a candidate say, 'Even my top priorities will be constrained by fiscal discipline.' "

In contrast, Bush has doggedly stuck to his massive tax cuts and costly energy plan, despite changing budget outlooks, Sperling said. Besides, if such tabulations are to include every campaign promise, Bush should be tagged with a Social Security reform plan that would cost at least $1 trillion over the first decade, said Jason Furman, Kerry's economic-policy director.

The president also has proposed a dramatic, tax-free savings account with annual deposit limits so large that they effectively would end taxation of capital gains, dividends and interest for all but the richest Americans. At $5.6 billion, the cost over the first decade would be small. During ensuing decades, though, the cost could be as high as $50 billion a year, according to an analysis by the Tax Policy Center, run by the Urban Institute and the center-left Brookings Institution.

Panetta offered another defense of Kerry: Do not believe all that he says. In 1992, Clinton pledged to tackle the deficit with some questionable proposals, Panetta said. Once in office, he stuck to that pledge far more strictly than the myriad campaign promises he laid out, pushing through a politically painful package of tax increases and spending cuts that helped bring the government into the black for four consecutive years.

"I didn't believe Clinton's numbers, either, when he was running," Panetta acknowledged. "But what was passed was not what he campaigned on."


Copyright © 2004 The Seattle Times Company

Bush, Kerry..............tomayto, tomahto.

"Kerry says he would offset the cost of those programs by cutting federal contracting, some agriculture subsidies and "out-of-control administrative costs" in the government. Other savings would come from a revamping of the student-loan program, a commission to cut "corporate welfare" and the elimination of some missile-defense and other military-weapons programs. ".........

So to pay for socialized medicine and other sKerry plans, he would cut JOBS (federal contractors, of which I am one!), hurt farmers (agriculture subsidies), reduce available student loans and weaken our military!

NO THANKS!

You've got to love a guy that always tells you what he thinks you want to hear. :p

Does it strike anyone else as odd that as a Presidential candidate he (sKerry) claims to have all the answers to all the major problems facing our nation--Yet as a national legislator for nearly 1/5 of a century he didn't implement a single program to fix any of them?

I guess he was just saving the best for last.

You like agriculture subsidies? Why? The family farm isn't the one drawing subsidies.....big agribusiness is.

You think the student loan program is OK as it is? When was the last time you sought out financial aid at a university?

You think a missile defense system is an appropriate way to spend a trillion dollars? To defend against whose missiles?

Just wondering how you could be against these suggestions............

If you think small farmers are not getting the subs check this link out. I know about 75% of the ones on the Wa list and they are all small farms.


http://www.ewg.org/farm/


When I was in school those recieving student loans where rich kids looking for party money. Those where the fanny and sally mae programs and you did not have to show need.

We did not think homeland security was needed until 9-11. Unless we can stop NK Iran and others it will be needed.

umrules,

You're a retired member of the military correct? You receive all of your medical benefits free of charge thanks to this fact, correct? The military healthcare system could be viewed as "socialistic" by most definitions. In essence, you and your family are relieved of the stress of having to worry about being able to afford healthcare, which is a good thing, but what about the 43 MILLION other American citizens who aren't.

"A key stated goal of agricultural subsidies is food self-suffiency to prevent the shock of rapid price rises in essential groceries. To submit the entire food supply of a nation to the whims of commodity markets is a poor idea.".....now Kerry probably isn't to concerned about the price of a head of lettuce, but many americans are.

As for student loans...."The demand for student loans is expected to continue to grow. According to projections made by the U.S. Department of Education, federal student loan volume is expected to grow to nearly $64 billion in FY2009." and cutting available funds is going to help how?

We don't need missle defense and other military defense systems? Nuclear weapons are confirmed to be in China, India and Pakistan and are suspected in Libya, Iran and North Korea. How many of those countries are on our best friends list?

4 Salt, while I was on Active duty, yes I received free medical coverage. Now that I am retired, no I do not receive free medical coverage. I pay for my health insuarance. It is very affordable coverage, but believe me, it is not free, I write them a check every quarter.

Go ahead and research farm subsidies in depth, TK. Let me know what percentage of subsidies are payed to family-owned farms. Besides, what do I care who owns it......how do you argue against socialized medicine and argue for farm subsidies?

Look into Star Wars too, and let me know if you think the results have been worth the price we've already invested. Then tell me how likely a ICBM attack on us is........

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Reagan's plan to shoot down ICBM's from space or 'Star War' was something that scared the former Soviet Union into realizing they couldn't keep up with the US tech./financially and led them (in combination with other things) to say NO MAS. The 'opportunity cost' of the program seems rather small when you consider that it helped to end the cold war.

If that same tech. saves the world from Mutual Assured Destruction from a rogue nation like Iran or Kim Jun "Mentally" Ill's N. Korea---Is that a bad thing?

As for the question of Socialized medecine---just ask some Canadian's how much they like it. Sure their visit to the dentist is free, but by the time they finally get in for a cavity filling--the tooth that was aching already fell out.

Dans,

I am not for farm subsidies at all.
Most farm subsidies do not not work like you think they do. They ususally pay people not to plant. The poeple I know on that list are well off and do not need the subsidies. They get paid 400k over 10 year not to plant wheat and then they plant grapes returning 10x what the wheat would have. They would have done it anyhow.

I'm not rallying for socialized medicine...........I'm asking why socialized medicine is bad when socialized farm production isn't.

And yes, SDI probably did bankrupt the USSR, but it hasn't moved forward since. Why? Because particle weapons are fantasy at this point. I just think thre are better options in defense to spend a trillion dollars on.

"Look into Star Wars too, and let me know if you think the results have been worth the price we've already invested. Then tell me how likely a ICBM attack on us is........"


Heck Dan with that logic why not pull the bumpers and seat belts out of your car. Cancel all the insurance policies while you are at it and knock off all the preventative medicine and take the locks off the doors.

Auto accidents kill about 50,000 Americans yearly.

There has never been an ICBM attack on the US.

Is your comparison valid?

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Maybe we can do some pin-point aiming and nuke all the drunk drivers.

The primary goal of the nations missle defense systems is not ICBM's, here is an excert that might help out:

"The primary mission of National Missile Defense is defense of the United States (all 50 states) against a threat of a limited strategic ballistic missile attack from a rogue nation. Such a system would also provide some capability against a small accidental or unauthorized launch of strategic ballistic missiles from more nuclear capable states"

Would you agree that there is a "possibility" of an unauthorized launch from a country with the stability of Pakistan, or India, or Iran, how 'bout North Korea?

And while agricultural subsidies do aid farmers, even the big ones, it's main purpose is to help the american consumer.

Emrules

Would you agree that there is a "possibility" of an unauthorized launch from a country with the stability of Pakistan, or India, or Iran, how 'bout North Korea?
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As fast as the terrorist are multiplying, I would be more concerned about the small, hand carried briefcase nukes, as pourous as our borders are. There are plenty out there (Russia) that are unaccounted for. Not to mention the one's that are currently in production.

The most important thing we can do to protect ourselves is get rid of Bush.

My .02

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Why wait for Kerry's plan (that may or may not work) to do something to help the health care crisis with all the hundreds of dollar$ Bushs' tax cuts put in to the hands of all Americans that work and pay income tax?

There are great privately funded health care facilities that never turn patients seeking medical care away because they don't have insurance or the ability to pay for treatment.

One clinic I like to help when I can is the Carolyn Downs clinic in Seattle--it was set up by a trust, and relies on contributions from the public to help keep the doors open.

I'm sure they'd really appreaciate you donating your tax $avings. I'm not trying to be smart, I'm just bringing attention to a place that's making a difference.

"strategic ballistic missile attack from a rogue nation"
Ummm, that is an ICBM. Asia to America would be considered InterContinental Ballistic Missle.

Now that being said, I think it's a complete waste of money. Too many military experts believe it won't even work. Unproven technology and, frankly, no way to test it until it's needed.

The real threat today is terrorism from radical groups. Those trillions spent on a missle defense boondoggle could do wonders in protecting our borders and ports, and equipping our first-responders.