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Kerry slams Bush over deficit

Bush campaign dismisses 'political gimmick'
John Kerry speaks about the federal deficit Wednesday at Georgetown University in Washington.

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• The Candidates: Bush | Kerry
John F. Kerry
George W. Bush
America Votes 2004

WASHINGTON (CNN) -- Democratic presidential candidate John Kerry promised Wednesday he would cut the federal budget deficit before it becomes a "fiscal cancer" that undermines the U.S. economy.

Kerry said he would raise taxes on the richest Americans, restrain spending, crack down on tax loopholes for companies that move jobs overseas and eliminate corporate welfare to cut the deficit -- now expected to run about $480 billion this year -- in half in four years.

"We can't restore fiscal responsibility unless we have a president willing to bring our divided parties together, and ready to be straight with the public about what we can and can't afford," the four-term senator from Massachusetts told a Georgetown University audience.

Most of the ideas Kerry has proposed earlier, but Kerry used the speech to tie them together and focus on the government's red ink. (Kerry's prior comments on Bush and spending)

The Bush campaign dismissed the speech as a "political gimmick," saying Kerry's record in the Senate belies any interest in fiscal discipline.

"Today's campaign rhetoric will do nothing to help him bridge his growing credibility gap on the economy," Bush campaign spokesman Steve Schmidt said in a written statement. "His speech failed to address the mystery of his own budget gap: Which taxes will he raise and which federal spending programs will he cut?"

In his speech, Kerry focused on what he described as the failures of Bush's policies.

Kerry said a growing federal debt will result in higher interest rates that will "dry up investment" and scare off overseas investors. President Bush's tax cuts, coupled with increased government spending, will result in a $6 trillion gap between spending and revenue over 10 years, he added.

"He made a clear choice: To pass the bucks to the privileged while passing the buck to our children," said Kerry, the Democrats' presumptive presidential nominee. "Because of this president's decisions, a child born today will inherit at $20,000 debt -- a 'birth tax' that he or she had no part in creating."

And in his biggest applause line of the speech, he cited the oil services company once led by Vice President Dick Cheney as an example of the kind of corporate welfare he would eliminate.

"Today mining companies buy public lands for $5 an acre, and Dick Cheney's old company, Halliburton, dodges taxes with offshore havens while it gets billions in no-bid government contracts," Kerry said. "If I am elected president, those days will come to an end -- and they should."

Bush says the more than $2 trillion in tax cuts he has pushed through Congress since 2001 have spurred economic growth. His re-election campaign has said Kerry would have to raise taxes by more than $900 billion to meet the campaign promises he has made.

"John Kerry's newfound interest in fiscal discipline is a political gimmick that defies his 20-year record in the Senate and stands in stark contrast to his reckless and expansive promises of new government spending on the campaign trail," Schmidt said.

Kerry calls the Bush camp's figures misleading, and said the president's tax cuts have shifted much of the U.S. tax burden "from wealth to work." He said restoring the tax burden on the top 2 percent of taxpayers would allow the federal government to extend health care benefits and boost spending for education.

Kerry said former President Clinton's decision to reduce budget deficits in 1993 led to budget surpluses by the end of this two terms in office and helped fuel a boom that created 23 million jobs.

"Because we limited the growth of the federal budget, family budgets began to grow," he said.

Kerry has promised to roll back Bush's tax cuts for people in the top income level. But he told National Public Radio in an earlier interview that 98 percent of Americans and 99 percent of U.S. corporations would pay lower taxes under his proposals.

"The only people in America who might pay additional tax would be those earning more than $200,000 a year, because we are going to roll back George Bush's unaffordable tax cut to the level it was under Bill Clinton. That's all," he said. "That's the only thing were going to do, and George Bush is misleading Americans about my tax proposal."

Kerry said he probably will have to scale back his own spending proposals on higher education, a national service program and early childhood education "because of George Bush's irresponsibility." But he said he would not reduce his proposals to spend money on health care, education and job-creation efforts.

He compared his proposals to those passed in the 1990s under Clinton.

"I can't think of an American who wouldn't trade today's economy for the economy we had under Bill Clinton -- they'd trade it in a nanosecond," Kerry said.

Ongoing exchange

Kerry's Wednesday comments are the latest in a series of remarks by both candidates on economic issues.

In the two campaigns' rival views on the economy, Bush offers an optimistic assessment, saying the economy hit a rough spot, but is strong and getting stronger. Kerry says American workers have suffered under the Bush administration.

Tuesday, Bush traveled to El Dorado, Arkansas, visiting a community college for a second day of talks about the economy and job training.

"We want every citizen in this country to get the skills necessary to fill the jobs in the 21st century," Bush said.

He announced a plan Monday to overhaul the federal job training program, including a doubling of the number of workers who go through such training. (Full story)

Other developments

  • Public impressions of Bush and Kerry were almost unchanged despite millions of dollars spent on television ads, according to the University of Pennsylvania's National Annenberg Election Survey. The survey, conducted in 18 battleground states, found that 41 percent viewed Kerry favorably in the first part of March compared with 39 percent during the last half, while Bush's favorability rating was 49 percent in early March and 48 percent in late March. (Full story)
  • Kerry said it's possible that he will meet with independent candidate Ralph Nader, whose campaign could potentially draw votes away from the Democrat, Reuters reports. Kerry reportedly said he would reach out to Nader's supporters in hopes of convincing them that he was the best chance of defeating Bush.

  • Reuters contributed to this report.

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