THE ISSUES 1988

ECONOMY TAXES GEORGE BUSH

“Read my lips: no new taxes.”

Opposes any tax increase. Advocates reducing the capital-gains tax on profits from investments to 15%; currently, individuals in the 28% or 33% tax bracket pay the same rate on capital gains as they do on ordinary income. Proposes a tax credit of up to 10% for oil and gas exploration. Advocates tax credits to low- and moderate-income families for child care and some educational expenses.

MICHAEL S. DUKAKIS

“He wants to give (the wealthy) a tax break. I want to collect the taxes they’re not paying.”

Won’t rule out higher taxes, but would consider them only “as a last resort.” Would stick to the 1986 Tax Reform Act “for the sake of consistency and predictability.” Opposes reduction of the capital-gains tax as a “giveaway to the very rich,” who would receive the vast bulk of the benefit from a lower tax on investment income.

BUDGET DEFICITS GEORGE BUSH

Proposes a “flexible freeze” on spending to help reduce the deficit. That approach would allow overall government spending to grow only as fast as the rate of inflation, while revenues would increase faster due to economic growth. But refuses to discuss which government programs would have to be cut to meet such a goal. Has vowed not to raise taxes under any circumstances. Supports the balanced-budget amendment and the line-item veto, but promises not to be confrontational with the Democratic-controlled Congress.

MICHAEL S. DUKAKIS

Refuses to discuss specifics of a budget plan, but promises to make the “tough choices” necessary to bring the deficit down steadily during his administration. Suggests that military spending can be cut by reducing waste and says that money can be saved on farm subsidies. Advocates raising revenues through stricter tax enforcement, but won’t rule out increasing taxes “as a last resort” if other deficit-reduction methods prove inadequate. Opposes balanced-budget amendment as useless for controlling the deficit.

TRADE AND THIRD WORLD DEBT GEORGE BUSH

Opposes protectionism, but favors strong enforcement of trade laws. Says American exports are robust and the trade deficit is already coming down. Dismisses Dukakis’ warnings about foreign ownership as “demagoguery.” Favors international negotiations and cooperation to phase out farm subsidies. Promotes aggressive negotiations on both a bilateral and multilateral basis to open new markets for American products. On Third World debt, favors a plan initiated by former Treasury Secretary James Baker III to roll over debts, extend new loans and encourage economic reform in debt-burdened Latin America.

MICHAEL S. DUKAKIS

Pledges to wipe out record trade deficit in four years, without spelling out how he would accomplish that goal. Advocates closing U.S. markets to foreign trading partners if they refuse to provide greater access to American goods. Proposes granting temporary relief to critical industries hurt by foreign imports under the condition that they modernize to compete more effectively. On Third World debt, favors approach advocated by Sen. Bill Bradley (D-N.J.) to require banks to ease debt burden so Latin American debtors will not be drained of resources needed for development. Calls on Japanese to contribute more funds.

SOCIAL SECURITY AND MEDICARE GEORGE BUSH

Pledges to make no changes in the current Social Security system. Although he has not talked much about health care issues during campaign, he would have to squeeze large savings from the fast-growing Medicare program to make his “flexible freeze” possible. Likely to follow Reagan approach of making Medicare beneficiaries pay more as a way to discourage them from seeking unnecessary treatment.

MICHAEL S. DUKAKIS

Vows to protect Social Security against threats from Republicans to cut benefits. Has devoted more attention than Bush to health issues, but also has not discussed how he would squeeze savings from Medicare in order to avoid rapidly escalating prices as health insurance is extended to millions of Americans with no coverage now. Likely to follow Massachusetts approach of forcing doctors to accept Medicare fees as full payment.

NATIONAL SECURITY DEFENSE SPENDING GEORGE BUSH

“If I knew of three new weapons systems that I thought were purely waste . . . they wouldn’t be in the budget.”

His “flexible freeze” on overall spending apparently would mean keeping the defense budget about even with this year’s rate of $300 billion, after adjusting for inflation. Over four years, at least $70 billion would have to be trimmed from the Pentagon’s current spending plans, a cut that many budget experts believe would be difficult in light of Bush’s commitment to keep the “Star Wars” missile defense on track, to continue two new land-based missile programs as arms control talks proceed, and to bolster non-nuclear defenses for Europe.

MICHAEL S. DUKAKIS

“We’re not going to spend the billions and trillions that Mr. Bush wants to spend on Star Wars.”

Advisers say current defense budgets are “about right” without additions for inflation. Candidate suggests up to $200 million may have to be trimmed from current Pentagon blueprints. Favors continued development of the stealth bomber, Trident D-5 missile and stealth cruise missile, but has rejected the small single-warhead mobile missile as too expensive and the plan to put MX missiles on railways as too vulnerable. Advocates shifting resources to non-nuclear defenses, stressing communications and submarine hunting technologies.

U.S.-SOVIET RELATIONS: GEORGE BUSH

Welcomes Gorbachev’s reforms but is wary that neither Gorbachev nor his reforms are permanent while Soviet Union remains a nuclear superpower. Says improvement in U.S.-Soviet relations is due to U.S. strength as well as Soviet economic woes, so would continue President Reagan’s “negotiate from strength” policy. Would exert “leverage” on Kremlin to continue improving human rights practices.

MICHAEL S. DUKAKIS

Says improved U.S.-Soviet relations are due primarily to Soviet economic difficulties; de-emphasizes U.S. military strength as a factor. Anxious to draw Gorbachev into more agreements and to make proposals that seize initiative rather than letting Gorbachev set agenda. Would link economic benefits to better Soviet behavior in human rights, the Third World and Eastern Europe.

ARMS CONTROL GEORGE BUSH

Wants cuts in conventional and nuclear arms and a ban on chemical weapons. Would retain options for building mobile ICBMs, which Soviets already have, as bargaining chips in strategic arms (START) negotiations. Supports “Star Wars” anti-missile development and wider interpretation of anti-missile (ABM) treaty, despite Soviet objections. Opposes total bans on nuclear-weapon and missile-flight tests.

MICHAEL S. DUKAKIS

Wants conventional, chemical and nuclear arms reduction. Would “modernize” land-based ICBMs but is not committed to new mobile missile to match Soviets. Would restrict “Star Wars” and keep to a narrow interpretation of the ABM treaty, as the Soviets desire, thereby advancing START negotations. Calls for total ban on nuclear weapon tests, ballistic missile flight tests.

OTHER ISSUES CRIME GEORGE BUSH

“For those real brutal crimes, I do believe in the death penalty.”

Calls Dukakis “soft on crime,” criticizing Massachusetts prison furlough program under which convicted murder William Horton Jr. committed a rape and torture. Backs death penalty for crimes involving murder, treason and espionage, and for major drug dealers. Supports mandatory sentencing. Would double federal prison budget to convert unneeded military bases into state and federal prisons.

MICHAEL S. DUKAKIS

“We have to protect constitutional rights in this country and be tough on violent criminals.”

Accuses Bush of politicizing a personal tragedy with the Horton case. Says 15,000 felons, including 7,000 convicted of drug charges, were released last year under Administration-backed federal furlough program. Opposes death penalty on moral grounds, but notes that even without it, crime declined significantly during his administration in Massachusetts while rising elsewhere. Opposes mandatory sentencing.

DRUGS GEORGE BUSH

Would increase funds for interception, prevention and treatment. Would place vice president in charge of anti-drug effort and would create international anti-drug force. Does not favor, but does not rule out, cutting off foreign aid to countries that fail to cooperate with the U.S. war against drugs.

MICHAEL S. DUKAKIS

Advocates cutting off foreign aid as a tool in the drug war. Would restore to $225 million an anti-narcotics package cut to $75 million last year under Administration pressure. Would double the number of federal drug enforcement agents and add 800 prosecutors. Would call a “hemispheric summit” on drugs.

CHILD CARE GEORGE BUSH

Proposes a $2.2-billion day care plan with a tax credit of $1,000 to low-income families with children under 4 years old.

MICHAEL S. DUKAKIS

Generally backs a $2.5-billion bill giving funds to states for needy families who use licensed day-care centers.

ABORTION GEORGE BUSH

Would ban abortion except in cases of rape, incest or when the life of the mother is in danger.

MICHAEL S. DUKAKIS

Supports women’s right to choose abortion. Favors federal funding of abortion for all poor women.

HEALTH CARE GEORGE BUSH

Supports allowing low-income workers to purchase Medicaid coverage, as an alternative to Dukakis’ health-insurance plan; details are uncertain but combined federal-state cost could be $5 billion to $10 billion.

MICHAEL S. DUKAKIS

Would require employers to offer a minimum health-benefits package to all full-time and some part-time workers at a possible private cost of $27 billion a year. Urges new prenatal and rural health care programs.

EDUCATION GEORGE BUSH

Would help middle-class families pay for college with tax-free interest on U.S. Savings Bonds. Proposes $500 million in awards to disadvantaged schools that show improvement; $50 million for experimental education programs; $50 million in federal matching funds for magnet schools.

MICHAEL S. DUKAKIS

Proposes federally guaranteed loans for any college student to be repaid at rates based on a borrower’s income. Recommends $250 million a year in scholarships to college students who commit to teach after graduation. Proposes a network of volunteers to help illiterates read and write.

ENVIRONMENT GEORGE BUSH

Supported Reagan veto of renewal of Clean Water Act. Vows to end ocean dumping by 1991. Supports construction of new nuclear power reactors with high safety standards. Generally supports offshore oil exploration except in environmentlly sensitive tracts; favors postponing leasing of one such tract off the northern California coast. Accuses Dukakis of delaying cleanup of Boston Harbor. Calls for substantial cuts in the emissions of the two ingredients of acid rain.

MICHAEL S. DUKAKIS

Supported renewal of Clean Water Act. Favors a ban on ocean dumping by 1991. Opposes new nuclear power plants until safe methods of waste treatment and disposal are found. Would ban offshore drilling off large parts of California and the East Coast. Would halt plans for disposing of radioactive waste in the oceans. Would end ocean dumping of sewage sludge by 1991. Calls for deep cuts in acid rain-causing emissions. Blames Reagan Administration for Boston Harbor cleanup delay.