Proposal Likely to Include Quick Tax Cut, Social Security Relief
WASHINGTON (AP) _ A temporary across-the-board tax cut of at least 10 percent and a new deduction for Social Security taxes are emerging as key elements in Bob Dole’s proposed economic package. But a fierce internal debate among campaign advisers is delaying a final decision into the weekend.
The presumptive Republican presidential nominee said today he is almost finished with his economic plan and will make it public on Monday.
``I will announce my plan to restore the American dream, to revitalize our economy and to create more jobs and more opportunities for all Americans,″ Dole said in his weekly radio address.
``My plan will put America on a path to a balanced budget by the year 2002,″ Dole said. ``It will also create a flatter, fairer and simpler tax system and will begin to change the size and power of the IRS.″
Earlier, outside his Watergate apartment, Dole told reporters he was ``this close″ to deciding on his vice presidential running mate. ``It was never a long list,″ Dole said.
Dole, despite a short break on Friday to attend the Olympics in Atlanta, has been spending most of his time lately fine-tuning the huge tax cut that will be the centerpiece of his economic program.
But those close to the process said Dole is keeping his final decisions to himself on a handful of key issues.
Former GOP presidential candidate Steve Forbes, a leading advocate of repealing income tax increases of 1990 and 1993 to simplify and reduce tax brackets, spent much of Friday at Dole campaign headquarters.
There, Forbes confronted those advocating an across-the-board tax cut of 15 percent, including Sen. Spencer Abraham, R-Mich., another key Dole economics adviser.
Participants called the session a standoff.
Those close to the deliberations said Friday that Dole was close to signing off on a $600 billion, six-year tax cut.
Dole reportedly was still torn between an across-the-board tax cut and a repeal of the tax increases of 1990 and 1993 _ as Forbes and former New York congressman Jack Kemp advocate. Such a plan would have the effect of dropping the top tax rate to 28 percent from the current 39.6 percent.
Several GOP sources said Friday that Dole was considering a hybrid _ a temporary across-the-board tax cut of about 10 percent, coupled with an eventual repeal of the 1990 and 1993 tax hikes once a ``flatter, fairer, simpler″ tax system was put in place.
Even so, in an NBC-Wall Street Journal poll taken June 20-25, 71 percent of registered voters said that if Dole proposes cutting federal income taxes 15 percent across the board _ as many of his advisers would like _ they would view it as a gimmick that wouldn’t make them more likely to vote for him.
Just 19 percent of voters said such a cut would be a commitment they agree with, one that would make them more likely to vote for Dole.
Dole’s plan also was expected to include targeted tax breaks for the middle class, principally allowing workers to deduct their Social Security taxes from their gross income _ a break worth up to roughly $350 a year for a family making about $40,000.
This is a variation on legislation proposed by Sen. John Ashcroft, R-Mo.
Meanwhile, Democrats ridiculed suggestions that nearly half of Dole’s $600 billion tax cut would be ``paid for″ not by spending cuts but by an assumption that the tax cut itself would stimulate economic growth.
Dole in the past has repudiated such ``supply side″ theories, which hold that tax cuts can partially pay for themselves through a rising economic tide.
``We’re prepared to contrast our approach to economics and tax cutting with what it looks like Bob Dole is planning to do,″ said Clinton-Gore campaign spokesman Joe Lockhart. ``From all speculation, Bob Dole looks like he’s about to propose tax cuts that he won’t be able to pay for and which will balloon the deficit.″
``The basic fundamental problem they have is that Bob Dole’s main mark on fiscal policy in this country has been repudiating supply-side economics,″ said Gene Sperling, a top White House economic adviser.
``And now, he’s stuck in the situation where every tax plan they’re considering is based on ... exactly the kind of magic money he spent the last 15 years rightly criticizing.″