Politics & Policy

Kerry’s Budget Bologna

His plan for deficit reduction lacks specifics and sense.

Last week, John Kerry spoke about the need for getting the deficit under control in a speech at Georgetown University. Although the talk had nothing in it that would motivate true fiscal conservatives to vote for him, it had just enough to alarm some liberals.

Twelve years ago, Bill Clinton faced another President Bush who had run up large deficits. To his credit, Clinton put out an entire book listing specific budget cuts and tax increases that he would implement if elected. Although a lot of it was smoke-and-mirrors, his proposal was a model of thoroughness compared to Kerry’s vague rhetoric.

To start, Kerry proposes cutting the deficit in half in four years. If this sounds familiar, it should. It’s exactly the same goal George W. Bush set forth in his 2005 budget issued in January, which every Democrat in Congress denounced as grossly inadequate.

Kerry then blames Bush’s spending for getting us into a budgetary mess. But he uses Orwellian doublespeak by calling tax cuts spending. So in other words, in Kerryspeak, if a taxpayer is allowed to keep a bit of his own money, it is exactly the same as if he got a check from the government. In the Kerry universe, apparently, if anyone pays less than 100 percent of their income to the government, they might as well be on welfare.

There is not one specific in the Kerry plan. He can’t even use his previous proposal to rescind the Bush tax cuts as a deficit-reducing action, because he has already promised that revenue several times for other tax cuts, expanded health care, and additional initiatives. So Kerry merely proposes budget rules that would require new spending to be paid for with tax increases — often called pay-as-you-go or “paygo” — and says he will reduce corporate welfare, as if this is enough to balance the budget.

Paygo rules are not a way of reducing deficits. At best they only keep them from getting worse. Paygo might have been helpful last year, however, since it might have stopped passage of the disastrous Medicare drug bill. So unless Kerry is proposing to make it retroactive, it is hard to see how paygo will do much of anything to reduce the deficit.

Even some liberals agree that Kerry is just playing games with his paygo plan. Writing on the website of Washington Monthly magazine, liberal Kevin Drum calls the plan “transparently silly” as Kerry would exempt 80 percent of the budget from the new rules. Drum concludes that Kerry “doesn’t exactly inspire visions of tightfisted fiscal rectitude.”

Other liberals are taking no chances. They are afraid that Kerry really will try and cut the deficit instead of spending vast sums on new social programs. Writing in the Boston Globe, liberal activist Bob Kuttner argues that Kerry should just be forthright about wanting more spending. “Forget trimming for the sake of legislative compromise,” Kuttner urges. Big spending is politically popular, he counsels.

Getting rid of corporate welfare is a fine idea. But I seriously doubt that Kerry has any intention of eliminating the biggest one: agriculture subsidies. Nor is he likely to go after trade restrictions, which do nothing but raise prices for consumers while fattening corporate profits. When Democrats talk about cutting corporate welfare, it means only one thing: tax increases. Kerry has already signaled his intention in this area by proposing higher taxes for U.S. multinational companies two weeks ago.

Kerry said that his new tax would create 10 million new jobs by forcing companies to invest here. But it would do no such thing. Economist Martin Sullivan looked closely at the Kerry plan and found it to be “duplicitous” because 10 million new jobs likely will be created by 2008 even if nothing is done. “The Kerry team has played fast and loose with the numbers,” Sullivan concludes.

Meanwhile, Kerry bristles at the Bush campaign’s charge that he has never seen a tax increase he didn’t like or a tax cut that he did. However, the liberal group Tax Analysts reviewed all of Kerry’s tax votes between 2000 and 2004 and found that the Bush charge is essentially correct. Virtually all of his 161 recorded votes on tax issues during that period were against tax cuts in one way or another.

The sad thing about Kerry’s effort is that Bush is vulnerable on the budget — although not for cutting taxes. The drug bill Bush rammed through Congress is going to cost trillions of dollars — money the Medicare system can ill-afford since it is already close to being broke. But Kerry can’t attack Bush on that score because Kerry wanted an even more expensive drug bill. That tells us just about all we need to know about Kerry the “deficit reducer.”

– Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.

Members of the National Review editorial and operational teams are included under the umbrella “NR Staff.”

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