Bob Dole launched the climactic final phase of his Republican presidential campaign Monday by proposing a $548 billion tax relief plan designed to attract economically squeezed voters and to portray President Clinton and the Democratic Party as “defenders of the status quo.”
Unveiling the new centerpiece of his presidential campaign during an appearance in Chicago, the financial capital of a region crucial to his election prospects, Dole said that his plan would “leave more money where it belongs–in the hands of the working men and women who earned it.”
His Reaganesque proposal for sweeping cuts in a range of federal taxes and and his call for abalanced budget within six years came one week before the GOP nominating convention begins in San Diego and exactly three months before the Nov. 5 election.
“Let me be absolutely clear: I don’t want to be president because I like how things are going now. I don’t like how things are going,” Dole told a luncheon audience of business executives and Republican supporters at the Fairmont Hotel. “I want to make America better, and I know that we can make America better for everyone. This program is just the first step.”
Dole’s plan features an across-the-board 15 percent cut in the personal income tax rate and a 50 percent reduction in the capital-gains tax. The proposal also calls for a tax credit of $500 per child for low- and middle-income families, an expansion of Individual Retirement Accounts and a repeal of the 1993 Social Security tax on upper-income earners.
Casting aside Democratic criticisms that his economic plan would sharply increase the federal budget deficit, the Kansas Republican pledged to balance the budget by 2002 and to end the Internal Revenue Service “as we know it.”
A deficit hawk who favored spending cuts over tax breaks during his 35 years on Capitol Hill, Dole defended his new plan as fiscally sound.
“Deficit reduction is in my blood, and a balanced budget will be my legacy to America,” he said. “What is impossible for a Democratic president captured by liberal, special-interest-group pressures is doable for a Republican president with a Republican Congress.”
Dole contended that Clinton’s policies have produced “an economy that is squeezing the middle class between high taxes and low growth.” If tended to by a doctor, Dole quipped, the American economy would be “committed to an intensive-care ward to be treated for anemia.”
The response from Clinton and the Democratic Party was swift and pointed. The president argued that Dole’s plan would “balloon the deficit, raise interest rates and weaken the economy.”
Clinton’s re-election campaign immediately launched television ads attacking Dole’s plan as a “risky, last-minute” scheme that threatens the nation’s economic health.
The Dole camp said the tax cuts would be paid for with a 10 percent cut in government spending, the sale of certain government assets and the elimination of some federal departments. He projected a 3.5 percent annual growth in a newly stimulated economy–well above the current level of 2 percent–and said it would provide $147 billion in new revenue, or roughly 27 percent of the package’s cost.
Dole described his plan using a hypothetical example intended to appeal to the middle-income and female voters his campaign desperately needs: A working mother of a two-income family squeezed by what he called a high-tax, low-growth economy under the Clinton administration. Rising interest rates mean a dollar doesn’t stretch far. The small company where she works doesn’t grow. The big company that employs her husband is downsizing.
Further, amid her uncertainty over how to make ends meet, he said, she worries about the quality of her children’s public education and whether her family can make a better life for itself. It is a tale of economic angst familiar to many Americans, one that Dole said parallels his Depression-era upbringing.
“She knows that if taxes were down and growth was up to the level of the mid-’80s, the family could make ends meet,” Dole said.
Vowing to “finish the job Ronald Reagan started,” Dole promised that a new GOP-controlled White House and Congress would make the spending cuts needed to avert an explosion of the deficit. He did not specify where the cuts would be made.
“With today’s pro-growth Republican Congress, cutting taxes and balancing the budget are just a matter of presidential will,” Dole said. “If you have it, you can do it. I have it. I will do it.”
Dole’s plan, finalized Sunday after nearly three months of deliberation, reflected a victory within his divided camp of advisers who advocated an across-the-board cut as opposed to targeted tax breaks.
“It is dramatic,” said Dole, underlining his move to construct a focal point for his campaign, which has been scorned within his own party as lacking a message.
The 15 percent reduction in personal income tax rates would be phased in over three years. The capital-gains tax on revenue from sale of stock or real estate would be slashed to 14 percent from 28 percent. Families would be eligible for $500 tax credits for each child 18 and under. A simplified tax code would allow 40 million Americans to avoid filing tax returns.
Dole promised to slash the size of the IRS and, borrowing a phrase from primary opponent Steve Forbes, said he would “free the American people from tax tyranny.”
Attacking two of the Democratic Party’s biggest fundraising sources, trial lawyers and unionized teachers, Dole said he would press for civil justice reforms and vouchers for school choice.
“As of this moment, Bill Clinton and his party are the defenders of the status quo,” Dole said. “We are the party of change, the Republican Party.”
