Boxer and Fong Split Sharply on Key Issues

By training and temperament, they are both money managers--she as a stockbroker, family budgeteer and U.S. senator; he as a business lawyer and now state treasurer. But they share little common ground on the kinds of financial issues that can be decisive in political campaigns.

She is a New Dealer and a Great Society-ite who believes government is the key to helping rescue the poor and bolster the middle class.

He is a Reaganite, a supply-sider and, of late, a flat-taxer. He believes government should get out of the way and let the private sector grow and spread the prosperity.

As America faces chaotic economies abroad and a jittery stock market at home, Sen. Barbara Boxer and her opponent, state Treasurer Matt Fong, offer voters distinctly different views on government spending, taxation and the role of government in managing the nation’s economy.

When Boxer proposes tax cuts, she prefers to find ways to make sure government revenues do not precipitously decline. When Fong suggests cuts, he is confident that cutting taxes stimulates the economy and makes for higher personal incomes, and thus keeps government coffers full.

“She is a classic Democrat, and he’s a classic Republican,” said Gary Jacobson, a professor of political science at UC San Diego. “Republicans like Fong have been making hay by attacking taxes since Proposition 13 hit them on the head. Liberal Democrats like Boxer are much more inclined to use taxation to provide money to solve social problems.”

Neither candidate has much use for the other.

“Barbara Boxer never met a tax she didn’t like,” said Fong.

“Matt Fong believes in something worse than voodoo economics,” Boxer said. “He believes in robbing the middle class to give to the rich.”

Fong, who served on a national commission to study taxation, backs the proposal of GOP presidential hopeful Steve Forbes to replace the current progressive income tax with a flat tax and provide exemptions for capital gains, interest and dividends. Boxer says that would merely shift the tax burden unfairly to people who live on salaries, not on investments. (Unlike Forbes, Fong would continue home mortgage deductions.)

Fong would like to end the inheritance tax, which he calls the “death tax.” Boxer counters that under a plan she voted for, all but the wealthiest 3% of people will be exempt from inheritance taxes by 2006.

“I think people with estates in the millions benefit from the American dream,” Boxer said. “For them to pay a little bit for the defense of the country and other necessary programs, I don’t think that’s too much to ask.”

Boxer has never done well by the lights of the National Taxpayers Union Foundation (although she has improved lately in its rating) or the National Tax Limitation Committee. “Barbara Boxer is the epitome of a tax-and-spend liberal,” said committee President Lew Uhler.

Boxer responds that such self-appointed tax watchdogs pick and choose which issues to use for their “report cards” and that Democrats nearly always look bad.

On the other hand, the California Tax Reform Assn., a more Democrat-friendly group, concluded recently that Fong’s flat tax would soak the poor and middle-class. The Fong plan would mean “a whopping tax increase on the vast majority of California voters,” said association director Lenny Goldberg.

The Fong campaign says Goldberg’s group distorted his plan.

Boxer would raise the national minimum wage. Fong says that would be a job-killer and end up putting more teenagers and young adults out of work. Fong would allow tax breaks for parents sending their children to private schools; Boxer replies that the Fong plan would undercut public education.

Even when they agree, they disagree.

Both would like to allow the self-employed to deduct more of their health insurance premiums. But Boxer, in exchange, wants to close what she sees as loopholes in tax laws pertaining to the logging and oil industries and companies doing business abroad.

Both believe that the Social Security system needs help, but they disagree on the remedy.

Boxer opposes the tax plan of Rep. Bill Archer (R-Texas), chairman of the Ways and Means Committee, now working its way through Congress. Fong supports the plan, which would decrease by 10% the size of the government surplus by, in effect, rebating that money to taxpayers.

“I think that’s irresponsible,” Boxer said. “They’re stealing from the Social Security Trust Fund. That’s like saying to your wife, ‘I have all this money, honey, let’s spend.’ But you really don’t have it. It belongs to your friends.”

Rather than increase taxes to keep Social Security afloat, Fong would allow each recipient to decide whether a portion of his or her account should be invested in the stock market--although a basic benefit would be assured. Although there would be some risk, Fong believes it would be small.

“We’re not talking about fly-by-night stuff, high-rider stuff,” Fong said. “We’re talking about things that public pension funds are [invested] in today. Let’s let the power of compound interest and the marketplace work for us.”

Fong has also made protection of private property an issue in the campaign.

He has proposed that the Endangered Species Act, which is being considered for renewal, be amended to streamline the process of removing species from the protected list. The goal is to allow property owners to develop or sell property that had once been deemed off-limits because it provided crucial habitat.

Seeking votes recently in the state’s agricultural heartland, the San Joaquin Valley, Fong suggested that whenever a species is listed, a “sunset” clause be attached requiring federal scientists to justify continued listing. Many farmers believe the Endangered Species Act imposes a hardship on them.

“The ridiculous and irrational results of the current administration of the Endangered Species Act must stop,” Fong said.

Boxer, long a favorite of the environmental movement, immediately seized upon Fong’s position and now routinely declares to campaign audiences that electing Fong would be the death knell for the act.

“If it is up to Matt Fong, you will never have another species saved,” Boxer said. “The bald eagle would never have been rescued if Matt Fong had his way.”

The Fong campaign snorts that Boxer is captive to the extreme edge of the environmental movement.

As Fong and Boxer espouse classic Republican-Democrat positions, each faces classic political pitfalls.

“Fong has to look like he’s not just a knee-jerk tax cutter,” said Jacobson. “Boxer, like all liberals, has to avoid being tagged a tax-and-spender, which is a major pejorative. Polls show consistently that people are in the middle on these things. They support spending but not waste.”