Will Not Change Tactics: Dukakis : Foe on Fringe on Economics, Bush Charges

Twice raising the specter of “socialism” and of “class conflict,” Vice President George Bush accused Democrat Michael S. Dukakis Tuesday of being “far outside the mainstream of economic thinking.”

While his Washington headquarters was unleashing a new television advertisement accusing Dukakis of lying, Bush used some of his harshest language to sow doubts about the Democrat’s commitment to the capitalist economic system.

Dukakis, the Republican presidential nominee said, “has broken with the American traditions of entrepreneurship and free enterprise.”

Hopscotches by Air

Bush’s attack came on a chilly day in Ohio, where he tried to nail down the state’s 23 electoral votes, hopscotching by air from Columbus to Akron and then to a late-afternoon rally in Lima, a farm community in the state’s flat, northwest corner. Ohio is part of the block of Midwestern and Eastern states that make up a key battleground in the race for the 270 electoral votes needed to win the presidency.

The vice president, speaking to members of the Ohio Assn. of Broadcasters in Columbus, hammered away at the economic theme he plans to emphasize this week, hewing to a week-by-week program leading up to Election Day that was drawn up by his campaign advisers to undercut Dukakis on a range of issues, from foreign policy and defense to social policy and the economy.

He strayed from that plan on Monday to launch a defense against a series of Dukakis television commercials attacking the negative nature of the campaign, considered perhaps the nastiest in recent his tory. In one of them, Dukakis denounces a Bush advertisement as “full of lies.”

Bush campaign strategists, apparently concerned that Dukakis’ criticism of Bush’s ads might be striking a responsive chord with voters, arranged a press conference in Washington Tuesday in which they promised to respond, according to their invitation, with “just the facts.”

Fact Sheets and Charts

The campaign flooded reporters with detailed fact sheets and carefully prepared charts outlining how it said Dukakis was trying to be misleading, and trotted out former Sen. John Tower of Texas, Gov. John H. Sununu of New Hampshire and Sen. Arlen Specter of Pennsylvania to carry the charge.

But when reporters challenged some of the facts in Bush’s fact sheets, Specter at one point had to admit he wasn’t sure of some of his statements and said he couldn’t vouch for the accuracy of the fact sheet.

The campaign also showed off a new advertisement, to be broadcast in cities around the country, stating that Dukakis deliberately misled “62 million Americans in the last debate.” This accompanies an excerpt from the second presidential debate in which Dukakis says he never raided the Massachusetts pension fund to balance the state budget.

The ad cites as its proof a report in the Wall Street Journal. In fact, the report was contained not in a news story but in an editorial from the Journal’s strongly conservative opinion page, and it differed in certain facts from recent news reports. But other news accounts have confirmed that he did dip into the pension fund, contrary to Dukakis’ assertion in the debate.

Returns to Course

Bush, meanwhile, returned to his plotted course on Tuesday with his speech to the broadcasters, criticizing Dukakis’ opposition to Bush’s proposed cut in the capital gains tax.

Dukakis argues daily that the reduction, favored by Bush, would mean a $30,000 tax saving for the wealthiest 1% of the nation. On Monday, Dukakis said the plan would save Bush himself $22,000 a year.

The tax is imposed on the profits from the sale of such holdings as stocks and real estate. Bush has proposed that it be imposed at a standard of 15%, rather than having it tied to the individual taxpayer’s tax bracket, which reaches to 28%.

“I have wondered if there is any rhyme or reason behind his fierce opposition to the capital gains tax cut,” Bush said, arguing that the reduction would stimulate investment and thus help create jobs, while leveling “the playing field” of international trade because such U.S. competitors as Japan, South Korea and Taiwan lack such a levy.

Saying that Dukakis’ approach to the economy was not rational, Bush lowered his voice for heightened dramatic effect and said: “He clings, despite all the evidence of the last two decades, to the discredited policies of high taxes and big government spending.”

‘Tax-and-Spend Governor’

Such policies, he argued, brought high taxes and over-regulation to Europe. And in the United States, “when we were moving in that direction last time, a tax-and-spend governor was in the White House,” he said, invoking what has become his standard label for Jimmy Carter.

“Around the world, governments are abandoning socialism. They’re moving away from the socialistic, high-controlled experience,” he said, adding:

“I have been disturbed as I’ve witnessed my opponent’s campaign over the several past weeks (at) the increasing appeals to class conflict. Good heavens. This is the United States of America. In my view, there is no place in American public life for philosophies that divide Americans one from another on class lines and that excite conflict among them.”

Economist Lester C. Thurow at MIT, a Dukakis supporter, defended the Massachusetts governor. “You can say a lot of things about Michael Dukakis, but nobody has ever accused him of being hostile to the free enterprise system,” Thurow said in an telephone interview.

Laffer Defends Bush

Conservative GOP economist Arthur Laffer, on the other hand, said Bush’s harsh attack was fair enough in a “political context.” In an interview from his California office, Laffer said: “Neither Dukakis’ own party nor the Republicans support him on capital gains (taxes). He is definitely outside the mainstream.”

At a later stop before a cheering throng that filled an airplane hangar in Akron, Bush criticized Dukakis’ attacks on the negative tone of the campaign.

“Because he was trying to run away from his record, I have factually pointed out where he stands on the record, and I am not going to be deterred,” Bush said. I am going to continue doing that, honestly and factually, and I believe that America will reject going back to the liberal failed policies of the past,” Bush said.

Staff writers John Balzar and Thomas B. Rosenstiel contributed to this story.