Comparing Dole, Clinton Economic Plans
August 27, 1996
Leaving aside political rhetoric -- of which there is much these days -- here is a short comparison of the economic programs being advanced by GOP presidential candidate Bob Dole and President Bill Clinton covering fiscal years 1997-2002.
- The administration's budget plan would lead to a $61 billion surplus by the end of 2002, according to the Office of Management and Budget, but only $1 billion based on the more conservative Congressional Budget Office calculations.
- The Dole plan also projects a $1 billion surplus by the end of the six-year period, but borrows $50 billion less than the Clinton plan ($505 billion vs. $535 billion).
- Both the administration budget and the one adopted by Congress in June -- which would be the initial departure point for a Dole presidency -- differ by less than 1.5 percent in total spending projections on nearly $6 trillion in programs.
Dole supporters say he would realize savings of $47 billion through realistic cuts in the budgets of the Commerce and Energy departments. Clinton aims to raise $60 billion in tax revenues by closing "corporate loopholes." This would seem to be in conflict with tax breaks designed to foster growth that Clinton has proposed.
- Clinton is proposing $100 billion in "targeted" tax breaks for certain groups.
- Dole's agenda calls for $548 billion in tax cuts which would affect almost everyone.
A key assumption underlying the Dole plan is that across-the-board tax cuts and reduction in capital gains tax rates would stimulate the economy sufficiently to raise revenues, which would partially offset losses from the cuts.
- If the economy were to grow at even modest rates -- starting at 2.5 percent next year and rising incrementally by 0.2 percent each year until it reaches 3.5 percent growth in 2002 -- the additional revenues would exceed current CBO projections by some $200 billion.
- That is far in excess of the $147 billion income growth effect presumed in the Dole plan.
In addition to the tax cuts, Dole's plan calls for $271 billion in deficit reduction to achieve a balanced budget in 2002.
Dole advisers say his plan would result in total savings of $610 billion and $227 billion in additional revenue -- equaling $837 billion. This, they say, is more than enough to pay for the tax cuts and still balance the budget in 2002.
Source: Judy Shelton (Empower America and a Dole adviser), "Why the Dole Plan Adds Up," Wall Street Journal, August 27, 1996.
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