A campaign of - issues. Bush-Dukakis debate credited in part with shifting contest from imagery to a battle of policies and programs

The October battle for middle-class votes is under way. The presidential candidates, down to the final month of the campaign, are targeting the huge center of the American electorate with a shower of ideas and proposals.

Suddenly, issues are in. Transparent political posturing is out, or at least less obvious.

George Bush, who wrapped himself tightly in the American flag during September, now can be heard discussing his plan for a new, tax-free savings program for moderate-income Americans.

Michael Dukakis, who rode an M-1 tank last month to show how tough he was on defense, now focuses on a new proposal to improve ethics in government.

``Issues are beginning to drive both campaigns,'' says Tom Herman, a senior adviser to Governor Dukakis.

The first presidential debate last week gets some of the credit. Mr. Dukakis, hoping to turn the debate away from the vice-president's ideological attacks, concentrated on ideas for the future. Until that time, most of Dukakis's proposals were being lost in the heavy political static created by Mr. Bush about the pledge of allegiance, furloughs for prison inmates, and charges that Dukakis was a liberal.

Bush has responded recently with fresh ideas of his own.

The candidates are attempting to address concerns shared by many Americans. Public opinion polls show that voters are worried by rising debts, competition from abroad, and soaring health care costs. They want to know:

Will my family be able to afford a home?

Will I have a job in the future?

Will my children have a job as good as mine?

Will college become too expensive for my family?

Will my financial future be jeopardized by illness?

There is also widespread public disgust with corruption in Washington and on Wall Street. Voters want it cleaned up.

Dukakis, sensing an area where Bush might be vulnerable, proposed last week an ``integrity-in-government initiative.''

``Something has got to be done about the revolving-door problem we have in Washington,'' Mr. Herman says.

Dukakis vowed that ``on the day I take office, I will sign an executive order to ensure that no top official ... will use his or her past position ... to peddle influence.''

The governor told one audience: ``If you accept a job with my administration, don't even think about cashing in on your contacts when you leave office.''

While discussing his plan, Dukakis was unable to resist a gibe at Bush: ``He may be satisfied to let Japan make the cars while his former colleagues make the license plates....''

Meanwhile, Bush was unveiling his proposal for ISAs, or individual savings accounts.

Bush aides estimate that about 7 million low- and moderate-income Americans would open ISAs. The accounts would be limited to $1,000 in savings per year. Only the interest would be tax deferred. But unlike some other tax-deferred plans, money could be held in ISAs only five years.

Bush argues that the plan would cost the Treasury ``only about $550 million a year,'' and would encourage savings.

Dukakis immediately jeered the plan - pointing out that it would save the average citizen only $20 a year in taxes. That would hardly be enough to buy a house or send a child to college, as Bush suggested, Dukakis said.

But the governor's own ``STARS'' proposal to fund college education got a similarly hostile reception from Bush.

STARS would allow college and vocational students to borrow directly from banks. The loans, guaranteed by Washington, would be repaid with automatic deductions from the students' future paychecks over their entire lifetimes.

The amount of money withheld would be a fixed percentage of total income. Thus, a high-salaried worker would repay the program faster than a low-salaried one, even if each borrowed the same amount. The program would be self-sustaining, with no cost to the federal government.

Bush blasted the proposal: ``We do not need to put the IRS [Internal Revenue Service] on your tail for the rest of your life as a reward for a college education.'' He charged that the program would ``create an auditor army of IRS agents.''

Meanwhile, Bush continued to argue for his proposed cut in the capital-gains tax, from 28 percent down to 15 percent. He called it a job-creating proposal that would pump billions of dollars into new investment.

Economist Alice Rivlin, former head of the nonpartisan Congressional Budget Office, says there's no clear evidence, however, that Bush's tax cut would - or would not - create new jobs.

Dukakis blasts Bush's tax cut as a ``five-year, $40 billion tax break'' for ``the wealthiest taxpayers in this country.''

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