Tsongas Says Key to Gain Is Long-Term Investment
In a Monitor interview, the candidate calls for sacrifice and rebuilding on industrial base
WASHINGTON — PRESIDENTIAL candidate Paul Tsongas's trademark may be a somber expression, but it reflects the "no pain, no gain" theme of his campaign. He calls for American sacrifice, not "easy solutions," to revitalize the nation's economy.
In a Monitor interview, the former Massachusetts senator assailed popular Democratic notions such as the redistribution of wealth and the current fixation on middle class tax relief. American voters are frightened about the country's future economic prospects, he says. They want jobs, not short-term handouts.
"How do you explain why we're doing so well?" asks Mr. Tsongas, referring to his long-term strategy for rebuilding the country's industrial base and spurring the service sector. "We're the surprise of the campaign."
His concern over the country's economic future echoes continually through his 85-page strategy booklet, "A Call to Economic Arms."
"The president has the capacity to galvanize the private sector," says Tsongas, whose goal is improved American manufacturing competitiveness without protecting United States markets.
Beefed-up US productivity means more savings, investment and tax receipts. With the government deficit under control, the Federal Reserve will work to keep interest rates low, and goods and services more affordable. His plan includes:
* A strong endorsement for industrial policy that fosters government investments in technological research and development. Money must target manufacturing processes, not simply innovation.
* Selected capital-gains tax incentives for long-term investments in corporate America. The longer a stock is held, the lower the tax rate on any gain.
* Capital-gains tax incentives for investments in new enterprises which make up the nation's most recent industrial growth.
* A 50-cent increase in the current gasoline tax, over 5 years, to promote energy conservation and generate more government revenue.
The former senator readily concedes that he's aggressively pro-business. If government fosters a successful private sector, there will be ample money to pay for the country's very costly social needs. A robust economy means a greater tax base for financing health care, college scholarships and affordable housing, he says.
Washington-area residents John and Mary Siciliano, recently converted Tsongas supporters, underscore the basics of Tsongas' message. With five children, they voice familiar concerns about the welfare of generations to come.
"All the 'feel good' Reaganomics stuff of the 1980s was not real," says Mr. Siciliano, a real estate businessman, who with his wife attended a fund-raising event for Tsongas on Capitol Hill this week.
"What's really bugged me is that for a long time, making money and being a Democrat seemed to be mutually exclusive.... I relate to Tsongas, his long-term incentives for business and his general long-term economic approach." For the first time, he says, he feels at home in the Democratic Party.
Tsongas offers no special concessions to the slow real estate industry: "You can give me all the tax credits you want, but until I have someone to fill the building, credits [to the real estate business] aren't doing any good."
And Tsongas may allay some corporate worries, but he also creates new ones. Businesses welcome his plan to build R&D credits into the tax code. But they bristle when they hear his strong adherence to what they see as costly regulations that cut into profits. On easing such laws, such as environmental standards, he says bluntly, "They're not going to get it from me - the idea that it's okay to denigrate the environment." In fact, he'd issue a presidential mandate to cut down the laborious decision-making time to pass those regulations.
m good news/bad news for the business community," he says. "As a businessman, I've lived in their world, so I'm aggressively pro-business. But I'm going to hold them to a much higher standard - especially in terms of corporate giving, the environment, and workers' relations."
Tsongas cast an economic line that reeled in 3,600 New Hampshire Republicans who wrote in the Massachusetts Democrat on their primary ballots. But he's made some liberal Democrats uneasy with his out-of-hand rejection of middle-class tax relief. It panders to voters, he says. "My job is to tell voters the truth.... Lower taxes mean the government just has to borrow more." Tsongas says he offers a way out from under the crushing US debt burden, but there's no easy way out.