Jobs, Taxes & Benefits

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The Difference is in the Details: Bush and Kerry on the Economy

Of late, the economy has been the centerpiece of the 2004 Presidential race, despite the unrest in Iraq.

Bush and Kerry have both been talking about tax cuts, decreasing the deficit, creating jobs, and improving healthcare and education. To the untrained ear, their speeches may sound very much alike.

Well, there are differences, big differences. And whom you vote for may very well affect your own economic future.

Let’s look at the details (the ones that are available, anyway.)

The candidates have offered some details, but have not revealed the very fine points of their plans. Still, we can look at the first layer of their economic proposals and see the different philosophies at work behind their policies.

#1- Strategy

The Bush administration is relieved that the latest jobs report was good news: 308,000 jobs were created last month, which is the strongest job growth in four years. To the Bush Administration, the recent job growth paired with rising economic growth, low inflation, low interest rates, and near-record home sales, is proof that their policy is working.

To the Kerry camp, one strong job report is hardly a trend. Kerry points out the millions of jobs lost over the past three years and blames the economic slump and huge deficit on bad Bush policy. He reminds voters again and again that Bush began his first term with a record surplus and is ending his term with a record deficit.

The upshot: Bush is trying to convince voters that his plan has spurred a major economic recovery. Kerry’s strategy is to focus on the economic hardship, critique Bush policy, and offer voters a new approach.

#2- Tax Cuts

Both candidates are talking about tax cuts. Bush wants to make permanent the cuts that he and Congress have passed during his term. Bush’s tax cuts are broad, meaning they go to corporations, small businesses, and people with varying levels of income. The Republican philosophy is that the economy will grow if corporations, business owners, families, and individuals pay fewer taxes, have more money in their pockets, and so have more of a chance to invest in new technology, sales force to find new customers, hire new workers, and purchase services and materials from other businesses.

Kerry and Democrats complain that Bush’s tax cuts benefit the wealthy who don’t need them and not the middle-income worker or family. They want to keep some of Bush’s cuts, such as increases to the child-tax credit, but plan to rollback taxes that benefit richer Americans in order to use the money to provide health and education services for more people. Pay as you go for those services (called pay go) automatically cuts the deficit. In his speech to Georgetown University on April 7, 2004, Kerry explained that he will cut taxes for the middle-class, but stop the income tax cuts for those who make over $200,000.

Kerry has outlined his plan in speeches and on his website (he has been more specific than Bush) and his idea is that rescinding Bush’s tax cuts to the wealthy will help him to cut the deficit in four years (one year less than Bush’s plan), revamp education and healthcare, and give 98% of Americans tax relief.

#3-The Deficit

Everybody wants to decrease the deficit. No questions there. Clinton’s economic advisors (who Kerry is utilizing) and Bush’s economic advisors all agree that decreasing the deficit is essential to strengthening the economy. The question is, how to do it?

Bush wants to cut spending to domestic programs. The philosophy seems clear: if you owe money, slow your spending. It’s where he’s cutting that’s important. His budget cuts funding to programs that Democrats care about, like Head Start and organizations that combat violence against women.

But Kerry plans to cut spending too. Using a strategy usually attributed to "Main Street Republicans," Kerry says he wants to slim down government. He would freeze the federal travel budget, cut loose 100,000 government contractors, and lower the government’s electricity use by 20%.

On the issue of cutting spending, Kerry has an advantage. Since he isn’t forced, as President Bush is, to submit a budget to Congress that would actually outline every dollar of every cut, he’s free to claim that he will cut innocuous expenditures like travel and electricity. However, he has admitted that he knows he will have “to make some hard choices" when faced with cutting programs to balance the budget.

Kerry also plans to defeat the deficit through a pay-as-you-go policy, which means Congress must offset any new spending or tax cut with spending cuts or increased revenue. That has already been voted in by a bipartisan vote in the Senate.

The upshot: Now that there is a massive deficit, both candidates will cut spending if the public (us) wants to decrease the deficit. We have a better idea of where Bush will cut because he has submitted a budget to Congress. We have fewer details about where Kerry will cut, but his record shows that he is unlikely to cut education and environment programs and initiatives that aid women and minorities.

The difference is in the details

In the details is where the true policy can be found. WomenMatter is committed to bringing you these details as we discover them, so you can make an informed, accurate choice in November 2004.

To discuss this topic with other WomenMatter readers, log on to one of our online forums. If Jobs, Taxes, and Benefits are important Life Issues to you, sign up for an e alert. And remember to register to vote.

Article Posted on: 4/12/2004

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