Debates to highlight differences between Bush, Gore economic plans
WASHINGTON (CNN) -- When Vice President Al Gore and Texas Gov. George W. Bush commence their debate Tuesday, they will bring with them two visions of economic policy that feature clear, sharp differences.
With a federal budget surplus of more than $4.5 billion predicted to roll in over the next 10 years, the candidates have different ideas about what to do with that reserve.
"The plans are quite different," said Robert Greenstein, an analyst with the liberal-leaning Center On Budget and Policy Priorities. "They're different in how much of the surplus they would use. They're different in where those surplus dollars would go. They're different in which groups of the population would get the principal benefits."
Gore, the Democratic nominee, says he would pay down the national debt. He calls for eliminating the portion held by the public by the year 2012. Bush also offers to pay down the national debt -- but over a longer time period -- by 2016.
Gore's approach has a Robin Hood component: In proposal after proposal, he would redistribute wealth, taxing upper-income persons for government programs to benefit the less affluent.
The Democratic nominee's plan to extend the life of Social Security, for example, would pour in hundreds of billions from general tax revenues -- more than half of which are paid by individuals making more than $100,000 -- to benefit lower-income retirees.
His version of private retirement investment accounts would also redistribute wealth, granting $35 billion a year in tax credits to subsidize the private accounts -- but only for those making less than $100,000 a year.
Bush, on the other hand, would favor those who "pay the bills," as he puts it. His tax cut is far bigger -- $1.3 trillion between now and 2010 -- and most of it would come in the form of an across-the-board cut in rates. Gore's collection of narrowly targeted tax cuts totals less than half of that -- $480 billion over the same period.
A bipartisan analysis by Congress' Joint Tax Committee indicates that those making over $100,000 a year would get 51 percent of the money under Bush's plan. But they would get very little under Gore: Most of his tax proposals have income caps.
"So there's actually big differences for low- and moderate-income families -- better under Gore. Big differences for very high-income families -- they get a lot more under Bush," Greenstein said.
For low-wage workers, mainly those making $30,000 or less, Gore would expand the Earned Income Tax Credit by $39 billion over 10 years. Bush's tax plan proposes no increase.
But in their effect on the economy, the plans may not be so different: Each would stimulate growth through tax cuts or spending increases, according to a new study by the conservative Heritage Foundation, which used a computerized economic model generated by the Wharton Business School at the University of Pennsylvania.
"We've put these very different plans into this model, and we got some results," Heritage Foundation analyst William Beach said. "And I guess the bottom line is that neither plan tanks the economy. In fact, both plans keep the economic growth moving forward."
Over the next decade, the Heritage study predicts Gore's plan would result in about 600,000 more jobs in the U.S. economy. The same study predicts Bush's plan would result in about 800,000 more jobs.
It also predicts that for a family of four making about $50,000 a year, disposable income would increase about $3,000 over 10 years under Gore's plan -- and $4,000 under Bush's.
"From those measures you could sort of say, well, the Bush plan kind of edges out the Gore plan at the tape," Beach said.