ECONOMY: INDUSTRIAL POLICY
How to expand American jobs and incomes. That, in a nutshell, is the dominant issue for many voters and one on which the candidates offer very different approaches. Conservatives have brought the term "industrial policy" into disfavor in recent years, arguing that it represents government intruding in the marketplace to pick "winners" and "losers" by funding research. Yet each candidate supports certain government programs to help United States businesses better compete against European and Asian rivals. G ov. Bill Clinton appears to occupy the middle ground between Ross Perot, who heaps praise upon Japan's aggressive industrial policy, and President Bush, who does not support a big increase of such spending. All three candidates favor tax incentives to encourage investment, a key area in which US companies lag far behind foreign counterparts. BUSH
Launched a National Technology Initiative in February aimed at increasing research partnerships between private businesses and the nation's federally funded laboratories. With the end of the cold war, the administration argues that it is critical for the federal labs to earn their keep by working with business, as they have long done with the Pentagon.
Supports easing antitrust restrictions that discourage some companies from forming strategic alliances with each other. Would make research-and-development tax credit permanent. Plans to boost small business by reducing the corporate tax rate from 15 percent to 10 percent and increasing a tax deduction for investment in equipment. Proposes "tort reforms" to reduce litigation costs. Seeks to hold government regulations in check. CLINTON
Would create a network of 150 "manufacturing extension centers," modeled on the US agricultural extension centers, to give small firms access to new technologies, training, and management techniques. Would spend $500 million a year on this.
Would establish a civilian advanced technology agency and redirect federal research money from military to civilian purposes. Argues that the current tax structure rewards companies for moving plants overseas by allowing them to deduct shutdown expenses when a US plant is closed and to deduct start-up losses when a plant is built abroad. Would establish permanent tax credits for new investment and research and development. Would abolish "unnecessary export controls" that limit trade in certain high-tech goods. Supports easing antitrust restrictions that discourage some companies from forming strategic alliances with each other. Advocates spending an added $20 billion annually on transportation and communications infrastructure. PEROT
Urges government-funded research to incubate key industries of the future, as is done by Japan's Ministry of International Trade and Industry. Says US antitrust law is outdated: "Don't worry about our businesses getting too big; worry about our businesses getting too small." Advocates tax credits for company spending on research and development and investment in new equipment.
Wants to remove capital-gains tax on small-business investment. Proposes a "stair stepped" capital-gains tax system, decreasing each year over five years.