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Can Kerry Sell Kerrynomics?

While John Kerry was schussing down Idaho's Mt. Baldy, Republicans were hammering the Democratic standard-bearer over economic policy. First, GOP pols began to portray the Massachusetts senator as a tax-and-spender who would unleash a $1 trillion avalanche of new tax hikes. President George W. Bush joined the fray at a Mar. 20 rally in Orlando. "There's a gap between Senator Kerry's spending promises and [the] promise of a lower deficit," he said. "Given Senator Kerry's record of supporting tax increases, it's pretty clear how he's going to fill the tax gap."

The assault on a still-evolving Kerrynomics comes as the Democrat's support is sagging under a Bush media barrage. So Kerry must scramble to regain the initiative. Step 1: an attempt to shift the debate from the GOP-friendly turf of taxes onto the more fertile Democratic soil of lost jobs.

That's why Kerry plans to visit Detroit on Mar. 26 to unveil a $12 billion-a-year plan he claims will create 10 million jobs by 2009. The centerpiece: small-business payroll-tax credits and tax breaks for employers who hire in the U.S. instead of outsourcing jobs overseas.

Still, the GOP has an opening, because Kerry's rhetoric may outstrip his wallet. His health plan costs $900 billion over 10 years; he pledges $70 billion to help states pay for homeland security; he backs generous veterans benefits; and he wants a costly energy-independence plan. Bush officials claim that this all amounts to $1.7 trillion in new spending, though they're reaching with some of the price tags.

Kerry is vulnerable because he has not revealed what many of his proposals would cost, insisting that there's plenty of money to be gained from a repeal of Bush's upper-bracket tax cuts to "invest in America" and halve the deficit. But no one knows if Kerry will have the clout with a likely GOP-controlled Congress to pull off repeal, or even if he does, whether that will cover his slew of promises.

A particular concern is Kerry's health plan, which would cover nearly all of the 43 million uninsured. One proposal: encourage companies to insure more workers by having the government pick up 75% of the tab for major illnesses. Kerry hopes to save money by reducing the cost of drugs and improving the quality of care. But some experts are skeptical that he can cover as many workers as he believes, while others doubt the efficiencies will materialize.

Fledgling Operation

Kerry is pulling together an economic team headed by Roger Altman, a former top Clinton Treasury official, and Gene Sperling, who chaired the National Economic Council. While this fledgling operation runs the numbers on Kerry's plans, Democrats are fighting back. They charge that Bush is bankrupting Medicare, and ridicule his stance on fiscal restraint. Says Sperling: "George Bush has either passed or proposed $6 trillion of new initiatives without ever proposing to pay for any of it."

Still, Kerry will surely be forced to draft a budget of his own as the campaign heats up. When the document is released, "it will be to the right of President Bush on fiscal policy," Altman vows.

Perhaps. But if Kerry is going to make the case that his activist economics is more credible and job-friendly than Bush's supply-side doctrine, he has to clear a big hurdle: convincing average Americans that he's not itching to raise their taxes. It could be "Dynasty, Part III." A soon-to-be-published book about the Bush family by authors Peter and Rochelle Schweizer says the clan already has discussed a Presidential campaign by George W.'s little brother, Florida Governor Jeb Bush. A source who requested anonymity says several past Bush donors have been asked to keep their powder dry for '08. Jeb's term in Tallahassee ends in 2006. That would give him time to earn some money before launching a national campaign. His spokeswoman brushed aside White House musings, saying the governor remains "focused on running the state." Another battle royal is breaking out in the telecom industry over rights to valuable airwaves. The Federal Communications Commission is considering a solution to interference problems that have arisen between fast-growing Nextel Communications and public-safety agencies. Regulators seem inclined to grant Nextel's wishes to abandon much of its current slot in the spectrum, leaving that band in the hands of safety agencies. In return, it wants new space in a potentially more lucrative part of the airwaves where other cellular-phone companies operate. Competing cellular providers, such as Cingular Wireless and even a handful of police and fire departments, complain that the switcheroo amounts to a big spectrum giveaway. Nextel says other cellular carriers operating in the safety agencies' zone are getting a free ride on its dime. It has offered to pay $850 million to cover switching costs.

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