As Dole’s self-imposed deadline for unveiling his budget plan approached – he promised to do so in a Chicago speech on Monday – his advisers argued over which tax-cut goodies to offer. In Column A, the main course was a phased-in, across-the-board 15 percent cut in income-tax rates, championed by Michigan Sen. Spencer Abraham. Column B was a varied menu cooked up by publisher/candidate Steve Forbes. It included a repeal of Clinton’s 1993 tax increase (abolishing the top rate of 38 percent), a cut in the capital-gains rate from 28 percent to 14 percent and a new provision to allow lower-income groups to deduct payroll-tax payments. The bottom line in either column: at least $600 billion in cuts over six years.
As his advisers struggled, Dole flew off to the Olympics. In his absence, his aides agreed on the Forbes plan – at least when Forbes was in the room. But when Dole returned to Washington on Saturday, he favored the 15 percent cut, phased in over three years. He liked its simplicity and its seeming fairness. He also liked the historical echo, for the idea is Reagan Lite. Sixteen years ago, Ronald Reagan launched his own fall campaign with a three-year, 30 percent tax-cut proposal nicknamed ““10-10-10.’’ Dole’s would be ““5-5-5.''
But like Reagan’s, Dole’s plan risks ballooning the deficit. He hopes to save money with a tax amnesty, reductions in government pensions and Medicaid and by eliminating four cabinet departments – all standard-issue items on the GOP wish list. But half the lost revenues are supposed to be recouped by faster growth: the golden faith of supply-side theory. Faith is required. NEWSWEEK estimates that repealing Clinton’s 1993 tax measure would have cost a whopping $50 billion in the first full year alone. ““Five-five-five’’ cleverly ““backloads’’ its impact on the budget. In the infamous ““outyears,’’ the loss could be substantial, perhaps $100 billion in 2002.
In his radio address last Saturday, Dole vowed to ““unshackle our economy from the big-government ball and chain.’’ But he risks his most cherished asset: his credibility. He is a lifelong ““deficit hawk.’’ The evil of federal debt was a central message of his first campaign for Congress, in 1960. Now he’s embracing supply-side economics, years after it came (and went) in GOP circles. So late in his career – so late in the campaign – it looks desperate. Clinton, meanwhile, can brag that the annual deficit has been cut in half on his watch – and that he’s a champion of fiscal responsibility. In other words, he can be Bob Dole.
