News: Analysis & Commentary
Commentary: George W. on Taxes: Don't Read His Lips
Right about now, George W. Bush would like nothing better than to change the subject. Enough babbling about his "youthful excesses" and possible cocaine snorting. Let's switch to some straight talk about what has been the dominant issue driving voters in recent Presidential elections: "It's the economy, pardner."
If only Bush could. While the Texas governor knows his precise pharmacological history but is leery of providing details, he has the opposite problem when it comes to economic policy. He'd love to give out the straight dope--he just doesn't know what Bushonomics is yet.WINGING IT. Clearly, though, Bush's policy will be built around some kind of big tax cut. According to an aide, "Bush thinks like a businessman, not an economist." He wants a tax code that spurs growth, even though the economy is growing so fast that the Federal Reserve is jamming on the brakes. The hangup: His blue-chip economic advisers, led by American Enterprise Institute scholar Lawrence B. Lindsey and including such heavyweights as Stanford University economists Michael J. Boskin and John B. Taylor, can't agree on which taxes to slash or by how much.
So while the brain trust wrangles, the candidate is winging it on the stump. And plans for a major economic-policy address in September have been put off until late fall. "They just can't come to grips with a plan," says one insider. "When it comes to taxes, they're just making it up as they go along."
Recently, Bush pledged to sign either a House-passed GOP tax bill that cut rates 10% across the board or a Senate-House compromise that opted to trim a percentage point from each bracket. Reaganesque reductions or within-bracket nips that are less controversial? Bush's aides refuse to say which he prefers.
On Aug. 14, Bush ventured into the tax thicket again and raised more questions. Interviewed by CNN commentator Robert D. Novak, he seemed to signal he would repeal President Clinton's 1993 tax increases--upper-bracket hikes that Republicans widely predicted would throw the economy into a tailspin but instead put the budget on a path to surplus. Clinton's plan was built around creation of two new top brackets--36% and 39.6%. Elimination of those top rates at a time of wild prosperity would cost an estimated $200 billion over five years and open the candidate to charges that Bushonomics mainly is compassionate toward the country-club set.
But aides privately doubt the candidate was suggesting the entire act be scrapped. "Does Bush aim to throw out all of Clinton's tax increases?" says an associate. "I don't think so. To him, it's just shorthand for cutting rates."
If so, it's shorthand that gives foes an opening. "Our increase in prosperity owes much to the 1993 deficit reduction act," says White House economic coordinator Gene B. Sperling. "Calling for repeal is just another way of saying the top 1 1/2% of taxpayers should get a large break at the expense of lower interest rates and fiscal discipline." Meanwhile, Bush backs higher defense spending, new charitable deductions, and a big education reform push, which also could eat into the surplus--a surplus Hill Republicans are spending faster than you can yell "Big government."
These inconsistencies are unlikely to damage Bush's appeal to GOP primary voters, who love nothing more than tax cuts. But they could haunt Bush later if, as the Republican standard-bearer, he must try to convince voters in the general election that he's truly a compassionate conservative. Although he also has pledged to help lighten the burden for lower-bracket taxpayers, he is again short on specifics about how. Notes one GOP source: "Rather than approaching this with an underlying philosophy, he's testing ideas to see what sells politically."
The muddiness gives Republican opponents a target. "Clearly, Bush is still undefined when it comes to his actual tax philosophy," snipes Bill Dal Col, manager of Steve Forbes's rival GOP campaign.
One of these days, of course, Bush will lasso his economists and clarify his thinking about taxes. But will it matter to Americans who persist in telling pollsters their interests do not lie with big tax cuts? And will his aid for the working class be rendered insignificant by largesse for the richest taxpayers? For now, if you're looking for the definitive Bush line on taxes, don't read his lips. You'll only get more confused.By Lee Walczak