Kerry Levels New Fire at Bush Over His Budget

Times Staff Writers

John F. Kerry, seeking to regain the initiative in the debate over federal taxes and spending, sharpened his attack Wednesday on President Bush’s budget record, but failed to detail how he would reconcile his own promises of cutting the deficit in half while increasing spending on domestic priorities and reducing middle-class taxes.

Kerry’s speech came after weeks of television ads and speeches from the Bush campaign accusing the presumptive Democratic presidential nominee of contemplating huge tax increases. That barrage continued Wednesday when Commerce Secretary Don Evans charged that Kerry’s agenda would raise middle-class taxes and reduce economic growth.

The Massachusetts senator, in his speech at Georgetown University, maintained that Bush’s agenda was undermining the nation’s prosperity by amassing record deficits after he inherited the largest budget surpluses in modern times.

That mounting red ink, Kerry said, threatens future generations with federal debt -- what he called a “birth tax” for young Americans -- and weakens the nation’s capacity to confront pressing challenges.


“This administration has squandered the historic opportunity to use the surpluses to save Social Security,” Kerry charged. “Job creation is slowed by increased uncertainty about our economic future.”

In many ways, the speeches from Kerry and Evans amounted to a competition of dueling legacies. Evans, opening a new front in Bush campaign arguments, insisted that Kerry’s agenda would return the nation to the weak economy it experienced under Democratic President Carter in the 1970s.

“We all look back to those days and say thank goodness we came to our senses a few years later,” Evans declared.

Kerry, by contrast, linked his economic approach with President Clinton’s strategy during the 1990s, which raised taxes on the top earners, eliminated the federal deficit, and coincided with an extended economic boom that created nearly 23 million jobs during his two terms.


“We know how to do this,” Kerry said. “We did it in the 1990s. Now it’s time to return our government to fiscal responsibility, and it’s time to return our country to investment in the future, to job creation and to the rising standards of living that Americans deserve.... “

Later, at a fundraiser in Washington, Kerry derided the Republican criticism of his economic plan. “All they could think of saying is, ‘My God, he’s going to make America the way it was in Jimmy Carter days,’ ... they don’t understand that Americans want answers.”

In his speech, Kerry offered few new details on how he would balance his goals of fiscal responsibility and increased public “investment” in areas such as education and health care. More specifics, he said, will come “in the months ahead.”

Kerry offered only broad guidelines for meeting his pledge to cut the deficit in half over four years. Key among them:

* Restoring federal budget rules that require Congress and the president to identify offsetting spending cuts or revenue increases when adopting new spending.

* Saving $92 billion over 10 years by squeezing spending in areas such as federal travel and the hiring of government consultants, and cutting federal administrative costs by 5%.

* Scaling back some campaign promises. Kerry identified two targets for contraction: guaranteeing universal access to preschool and funding college tuition for young people who agree to perform two years of national service

* Eliminating federal business subsidies and “corporate welfare” which Kerry said could save “tens of billions of dollars.”


By deferring his release of a more specific fiscal blueprint, he seems unlikely to significantly change the terms of debate between the campaigns over taxes and spending.

Still, the sharp exchanges between Kerry and Evans come at a time when polls reflect growing concern about the federal deficit, which reached a record $375 billion last year and is expected to soar to nearly $480 billion in the current fiscal year.

In surveys conducted by the Pew Research Center for the People & the Press, a nonpartisan polling group, the percentage of Americans who said reducing the deficit should be a top priority has jumped from 35% in 2002 to 51% this year.

An ABC/Washington Post poll this month found that more Americans identified the deficit as a significant problem than gay marriage, taxes or providing prescription drugs to seniors.

“The public is recognizing this as an issue increasingly,” said Andrew Kohut, director of the Pew Center.

While most political analysts believe few voters make their choice on the deficit alone, many believe it can emerge as a powerful symbol of perceived Washington mismanagement when Americans also are uneasy about the economy.

That was the case in 1992, when Clinton and independent Ross Perot cited deficits then at record levels as a centerpiece of their economic case against President George H.W. Bush.

Democrats view the deficit as a potential vulnerability for the younger Bush because the nation’s fiscal position has eroded so dramatically during his term.


The government amassed surpluses during the final three years of Clinton’s presidency -- the longest such streak since the late 1920s -- and as Bush took office, the Congressional Budget Office projected the federal debt would be eliminated by 2008.

But the CBO now projects that Washington will run large deficits through the decade, swelling the publicly held federal debt to nearly $6 trillion by 2009, a 50% increase from today.

Bush has blamed those deficits largely on the slowing economy he inherited from Clinton and the costs of waging the war against terrorism. Like most Democrats, Kerry says Bush’s tax cuts have contributed most to the problem -- though Kerry, in his speech, also echoed some conservative Republicans in accusing the president of “excessive spending.”

Bush has tried to shift the focus toward Kerry’s proposals, arguing that the challenger would either increase the deficit or significantly raise taxes because he has promised so much new spending.

In an updated report released Tuesday, the Bush campaign said Kerry’s proposals would increase federal spending by at least $1.9 trillion over the next decade -- over $1 trillion more than he would raise through his announced proposals to raise taxes on income, capital gains, dividends and inheritances for wealthy families.

Evans charged that the cost of Kerry’s proposals would mean higher taxes not just for the affluent but a broad cross-section of Americans.

The Commerce secretary also denounced the Democrat’s plan for a tax credit that would be available to small businesses and manufacturers that hire new workers.

“It would set the government up to determine which industries should hire more workers,” Evans said. “Other industries and business owners who want to add workers would be at a competitive disadvantage to the government’s preferred policies.”

Kerry, in his speech, reiterated his pledge to raise taxes only for families earning $200,000 or more, while lowering taxes for the middle class. He repeated his campaign’s recent charge that Bush has endorsed $6 trillion in spending obligations without also identifying the funding, such as his plan to create individual investment accounts under Social Security.

Kerry has claimed the Bush camp is inflating the cost of the Democrat’s agenda.

Both in Cincinnati and in his Wednesday speech, the Democratic candidate pledged that he would “show what I’m going to cut in order to pay for what we’re going to provide.”

But he has not provided his own specific accounting of how much he believes his agenda costs, or how he would fund it.