Archive for Saturday, September 25, 2004

Bush, Kerry budgets differ, but both ring up $1 trillion

September 25, 2004


— President Bush and Democratic Sen. John Kerry have starkly different economic priorities with a common thread: price tags exceeding $1 trillion that could pump already huge deficits skyward over the next decade.

Headlining Bush's budget goals for a second term is making permanent the tax cuts he has pushed through Congress, at a 10-year cost the administration sets at nearly $1 trillion. Leading Kerry's agenda are his 10-year, $653 billion health care plan and a $207 billion education package.

Both candidates supported the five- and six-year extensions of $133 billion in middle-income tax cuts that Congress passed Thursday. Kerry wouldn't have included the $13 billion in renewed business tax breaks that Congress attached to it but would have added bigger government child-support checks to working low-income families who do not pay income taxes.

Though he has offered no details, Bush also would let workers divert part of their Social Security taxes to new personal savings accounts -- which some analysts estimate could cost $2 trillion over the period.

Kerry would raise the money for his priorities by repealing tax cuts on upper-income people, increasing government efficiency and prodding companies to improve workers' health coverage. Some analysts say he has underpriced his health plan and proposed some savings that are wishful thinking.

"They are presenting very, very different agendas. But they arrive at roughly the same place relative to the deficit," said Robert Bixby, executive director of the Concord Coalition, a bipartisan group that advocates balanced budgets.

Bixby estimates both men's initiatives would increase the government's red ink by at least $1.2 trillion through 2014.

Bush and Kerry each assert they would cut the annual deficit in half within five years.

Kerry favors budget restrictions that go further than Bush, like requiring savings to pay for tax cuts, and has said he would trim his priorities if deficits worsen.

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