Al Crunches His Numbers
Al Gore sought to make the case that he can pay for all his campaign promises and maintain fiscal discipline if elected president.
Democrat Gore spelled out ten ambitious economic goals aimed at raising living standards and improving retirement security on Wednesday. In his speech at Cleveland State University, Gore unveiled a Democratic "Contract With America" of sorts, called "Prosperity For America's Families". The vice president argued he can meet his fiscal goals while also paying off the national debt, balancing annual federal budgets and running a surplus.
To that end, Gore proposed a $300 billion dollar "reserve fund," essentially a rainy day fund for the federal government. That money would represent a third "lockbox" which would, as Gore put it, come "with a sign that says: 'politicians, hands off.'" Already the anticipated $2 trillion-plus Social Security surplus over the next decade is considered "off budget" by both major parties. Democratic and Republican campaign rhetoric this year treats Medicare's surplus as sacrosanct, too.
| Gore's Promises |
For the most part, Gore's plan repackages policy goals and spending initiatives that he has detailed on the stump, a la carte, since the dimensions of the rosy surplus projections appeared this spring. What's new are the reserve fund and the quantified goals, like the household savings and college enrollment targets.
The Gore campaign posted the nearly 200-page plan on its Web site. In his speech, the vice president encouraged voters to see for themselves. "You don't have to guess at what the specifics are - you can read my plan," he said.
Robert Rubin, the former Clinton Treasury Secretary who's popular on Wall Street, introduced Gore with bullish testimonial: "I believe this is a strong plan for achieving the right goals for our economy."
Rubin endorsed Gore's deficit reduction framework and said "almost diametric differences" separate Gore and George W. Bush's fiscal plans - claiming the Bush approach could "eliminate almost half" of the Social Security surplus.
Gore advisor Ron lain argued his candidate's plan works under the economic assumptions of both the White House and the Congressional Budget Office (CBO).
"We're prepared to do apple-to-apple comparisons with Bush under either set of assumptions," said Klain, who asserted Bush's economic package will run the country $2.8 trillion into debt in ten years.
Lest they be accused by the Gore campaign for the second time in two weeks of stinginess with policy details, the Bush team fired back with its laundry list of proposed surplus spending that shows $265 billion left over. "Fantasy accounting," Klain sniffed.
Yet Bush didn't let the fanfare surrounding the Gore goals drown out his tax-cutting message. At outdoor rallies in Wilkes-Barre, Pa. and Indianapolis, an edgy, fired-up Bush defended his economic plan.
Promising to return one-quarter of the total projected federal surplus to taxpayers, the governor said, "You tell me whose plan is on the side of the workin' people?!"
Bush added Gore's spending plan is "greater than the projected surplus." In a press release, his campaign estimated the overrun at $906 billion. And the Republican nominee boasted about the endorsement of his fiscal package by 300 economists, including six Nobel laureates. Last but not least, the governor introduced another "tax family" whom he promised will see their federal income taxes reduced by $1,775 dollars if he becomes president.
Chase Securities, Inc. economist Jim Glassman said he's "disinclined to take all these numbers at face value." Given that either candidate's economic plan has to pass Congress, the proposals that Gore and Bush are touting are "more a way to say, 'Here's how I would approach the problem.'"
"In terms of the macro numbers," Glassman said both spending plans "seem to add up to similar orders of magnitude."
Former CBO director Robert Reischauer, now with the Urban Institute, thinks Gore's $300 billion dollar reserve fund is "prudent," both fiscally and politically.
"I think that it is commendable and appropriate given the uncertainty which surrounds all these budget estimates. If you put money aside, it doesn't mean you can't spend it later," he said.
From a political angle, Reischauer said Gore's doing a little "product differentiation" by creating a third "lockbox."
"The average voter in Peoria is at this point unaware of it, but two months from now, after Gore's pounded on it, they will in their political subconscious remember that he has a little rainy day fund," he said.
Glassman likes the fund, too.
"From the point of view of financial markets and interest rates, you have to admit that any proposal that says 'we're gonna go carefully' has got to be viewed as more comforting than not," said the Chase economist.
The candidates could debate their respective spending plans in agonizing detail - if only they coud get in the same room.
Gov. Bush continues to dig his heels in over the debate schedule. On Wednesday, the Texan's campaign put out a TV ad taunting Gore, as if the vice president were the one who is debate-shy.
In fact, Gore would do the two debates Bush wants, but only in addition to three encounters planned by the bipartisan commission that traditionally hosts presidential debates. Bush has agreed to only one of those three, which would draw more TV viewers than the single moderator NBC and CNN shows where Bush prefers to engage Gore - forums will command fewer viewers because they won't air on rival networks.