POLITICS ’88 : Bush Reiterates Stand to Not Raise Taxes but Sees Need for More State, Local Funds

Midway through a series of meetings with economic advisers, Vice President George Bush reiterated Tuesday that he will not raise federal taxes, but he acknowledged that programs he hopes to invoke may force local and state governments to increase revenues.

Bush, meeting with reporters here, said advisers drew him an essentially rosy sketch of the American economy and their views firmed up previously held positions of his, including support for a cut in the capital gains tax.

Pressed about whether the advisers had advocated a tax increase to cut the nation’s deficit, Bush said they had engaged in a “discussion” about taxes but indicated it went no further.

“I simply said, ‘Look, I’m not going to propose a tax increase.’ Nobody was advocating a tax increase,” Bush said.

In campaign speeches, Bush has called for additional spending for AIDS research, the environment, education and perhaps the U.S. military. But he said Tuesday that he has yet to come up with a specific set of budget cuts to offset such spending.

“I know I’m getting a better idea (of potential budget cuts),” he said. “I don’t have a defined program on that now.”

‘Bully Pulpit Concept’

The vice president Tuesday renewed his call for heightened emphasis on education, but said that did “not necessarily” mean more federal spending for school programs. “Some areas it’s exhortation, bully pulpit concept,” he said.

But he admitted that by invoking education as a national priority and establishing federal education programs, he might be setting the stage for increased taxes by state and local governments, which bear the brunt of the nation’s education costs.

“They may have to (increase taxes),” he said.

“But if it’s taxes, that’s where it has to be. It isn’t going to be at the federal level.”

Aides said later that the vice president did not consider contradictory his public stand against taxes and his recognition that Bush programs might force increased taxes by lower government bodies.

“That doesn’t have anything to do with him,” senior strategist Robert S. Teeter said of the prospect of local or state tax increases.

Bush, like other presidential candidates this year, has been loathe to lay out specific plans on the economy, and his fiscal policies have yet to be beefed up beyond a few positions announced during the campaign.

Overall, besides insisting that he will not raise taxes, Bush has stated that he will cut the capital gains tax from 28% to 15%, and he has vowed to call a fiscal summit with congressional leaders to determine some way of cutting the deficit.

He also supports what he calls a “flexible freeze,” which would freeze the federal budget’s overall spending total, with a 4% annual allowance for inflation. Specific programs could be cut or bolstered as long as the bottom line was balanced.

Bush reconfirmed his faith in those points Tuesday but refused to detail further specifics. And he implied he may decide not to spell out more of his priorities in the near future.

“I don’t think a President should have to have a 20-point program on every subject out there,” he said.

Does Not Favor Wholesale Change

But he did make clear that ultimately, his fiscal programs will not represent a wholesale directional change from the policies of the Reagan Administration.

“The fact that the economy has worked and more Americans are at work than ever before--does that argue for me to show credibility with the American people to go out and radically redesign something? No!” Bush said.

Among the fiscal advisers brought to Bush’s seaside estate for discussions Tuesday were former Deputy Treasury Secretary Richard Darman; Richard Rahn, chief economist for the U.S. Chamber of Commerce; Michael Boskin, a Stanford University economist, and Martin and Kathleen Feldstein of the National Bureau for Economic Research. They are also scheduled to meet with Bush today.

Bush said the economists characterized the nation’s fiscal health as strong and offered no predictions of a recession in the near future.

“There was a feeling that we do have to continue to make progress on the deficit,” the vice president said.