JOHN KERRY: FREE-SPENDING LIBERAL OR DEFICIT HAWK?
July 27, 2004
John Kerry promises higher spending, higher taxes and overall deficit reduction. But the details do not add up, says Kevin Hassett, director of economic policy studies at the American Enterprise Institute.
How much would all of these promises cost?
- Kerry's health plan alone would cost about $1 trillion, says Kenneth Thorpe, a former Clinton official and Emory University professor; Thorpe subsequently revised that figure to $653 billion, claiming $300 billion in savings from increased preventive care for the previously uninusred.
- Starting with the lower number, the National Taxpayers' Union Foundation recently estimated that Kerry's proposals would increase government spending by $226 billion in his first year in office; that's about $2,000 per American family, or 10 percent of the federal budget.
- A 10-year score estimates that the total costs of Kerry's proposals would be at least $2 trillion from 2005 to 2014, according to Hassett.
Kerry's tax proposal is to renew the cuts that were provided in recent years to the so-called "middle class," to reverse reductions provided to those with incomes above $200,000, and to introduce a new tax credit for higher education. All of the tax cuts enacted by Congress and President Bush are currently scheduled to expire, so Kerry's tax plan actually reduces tax revenue by more than $400 billion over 10 years, says Hassett.
If we put the spending and tax sides together, the first budget that Kerry will submit would increase the deficit over 10 years by a minimum of about $1.2 trillion and, more likely, by well over $2 trillion. While a few smaller proposals from Kerry raise a little more revenue, they do not go anywhere near the level necessary to close the enormous gap between spending and taxes, says Hassett.
Source: Kevin Hassett, "Two Trillion in Ten Years," Wall Street Journal, July 27, 2004.
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