The Democrats' Plan
As the Democratic National Convention in Chicago draws to a close, the administration's pitch to the voters is clear: It's getting the job done; the economy is growing again; the Republicans are extremists who will bring economic disaster and destroy the social safety net. Stick with us, the Democrats say, and things will get even better. Elect Bob Dole and a Republican Congress and the dawning new prosperity is at risk.
A host of administration officials and advisers has trouped before reporters at Monitor breakfasts and lunches this week to read from the same script: The deficit is down 60 percent from four years ago. The federal government is the smallest it's been since John F. Kennedy. More than 10 million new jobs have been created. The "misery index" - the combination of inflation and unemployment - is at its lowest level in 30 years. Middle-class wages have started growing again for the first time in two decades. All this is the result of Clinton's economic policies, the administration says. (The Republican Congress, apparently, had little to do with deficit reduction.)
President Clinton, in his acceptance speech last night, called for continuing economic growth by staying the course: balancing the budget by 2002, increasing investment in education and worker training, and enacting a small package of targeted tax cuts - something in excess of $100 billion. Most of these tax cuts, which he has proposed before, would be aimed at the lower middle class. Another addition to the mix: a $1.4 billion capital gains tax cut on home sales.
The president contrasts this with Mr. Dole's $500 billion tax-cut and balanced-budget plan, which Mr. Clinton claims would inflate the deficit, thereby driving up interest rates and slowing economic growth. He says that he can pay for his tax cuts, while insisting that Dole cannot without "slashing" Medicare, Medicaid, and other entitlement programs.
The Democrats are doing all they can to equate the Dole plan with the tax cuts and high spending of the 1980s, which contributed to the present deficit. But the Dole plan is different: It predicts that revenue increases generated by tax cuts will make up for only 30 percent of the revenue lost from the cuts. The original supply-side theory of the early '80s held that revenues would increase to make up the entire difference. Dole's problem now is in specifying the needed spending cuts.
The Democrats are also indulging in demagoguery on Republican attempts to reform Medicare and other entitlements. These programs are in serious trouble. By implying that they will make no changes when they know full well changes need to be made, they do the country a disservice.
The president should get a "bounce" in the polls from two weeks of staged bill signings, train travel, and conventioneering. Some experts claim he has the election in the bag. But it will be another week before public opinion hardens into reliable poll numbers.
Even if Dole is more than 10 points behind, there is precedent for making up the difference.
But that will be difficult, especially if Clinton hangs onto about 50 percent of the popular vote and Ross Perot gets even 5 or 6 percent, which will mostly come from people who would otherwise vote for Dole.
As James Carville, Clinton's 1992 strategist and still a campaign adviser, puts it: "Dole will get the Republican vote back. The race will tighten; it always does. But I'd rather be us than them."