Democrats Hillary
Rodham Clinton, Barack Obama and John Edwards have
proposed vast policy programs costing billions of dollars.
Republicans Rudy Giuliani, Mitt Romney, John McCain,
and Fred Thompson have vowed to extend President
Bush's tax cuts and continue the multibillion-dollar
wars in Iraq and Afghanistan indefinitely.
The top
candidates on both sides of the 2008 U.S. presidential
contest have shown their eagerness to spend tax
dollars. But their priorities reflect widely differing
views of the role of government in addressing complex
problems.
Clinton, Obama,
and Edwards have embraced ambitious government programs
to help provide health care and education and to conquer
global warming. For the most part, Clinton and Obama
have offered specific ways to fund their proposals,
while Edwards has argued that running a modest federal
deficit is acceptable if it means investing in health care
and reducing poverty.
Giuliani, Romney,
McCain, and Thompson promote tax cuts and the need to
rein in federal spending. They frequently deride their
Democratic rivals as big spenders, but are themselves
reluctant to say what they would cut to pay for tax
cuts and U.S. military engagements.
Paul Weinstein,
an economist at the centrist Progressive Policy
Institute, argues that candidates of both parties need to
adjust their rhetoric if they are to be taken
seriously as responsible fiscal stewards.
''Democrats need
to talk about budget cuts first -- not just things like
closing corporate loopholes, but specific programs they
would cut to have the money necessary for other
things,'' he said. ''Republicans need to 'fess up'
about the fact that under the Republican leadership of the
last six years, we've cut taxes but we've also spent
more and not managed our books. Low taxes are
important for growth but we also have to make a
reasonable attempt to trim government.''
Here's where the
major candidates are on federal programs, spending, and
tax cuts:
DEMOCRATS:
Clinton's latest
proposal, a $1 billion paid family leave program
outlined Tuesday and financed by eliminating some tax
shelters, comes atop several other major costly social
programs she's outlined recently. But the New York
senator isn't the only Democrat advocating major new
federal initiatives. Obama and Edwards also have laid out
multibillion-dollar programs on health care, energy
independence and tax fairness.
-HEALTH
CARE: Clinton, Obama, and Edwards have outlined major health
insurance plans with the goal of providing universal
coverage for all. Obama has estimated his would cost
$50 billion-$60 billion per year, while Clinton and
Edwards say theirs would cost closer to $100 billion
annually. All say they would pay for the plans largely by
allowing Bush's tax cuts to expire on schedule in
2010.
-ENERGY:
They have proposed expensive initiatives to reduce the
reliance on fossil fuels.
Clinton wants to
create a $50 billion ''strategic energy fund'' to
develop new sources of fuel and has proposed paying for it
by eliminating tax subsidies for oil companies.
Edwards has outlined a similar program and would
eliminate the oil company subsidies as well as establish a
cap-and-trade system requiring companies to pay for emitting
pollution.
Obama has pledged
a 10-year, $150 billion program to produce
''climate-friendly'' energy supplies. To pay for it, he
would implement a 100% carbon auction where businesses
would have to bid competitively for the right to
pollute.
-TAX
RELIEF: Obama and Edwards want to shift the income tax
burden. Edwards's $25 billion per year plan would cut
middle-class taxes by raising the capital gains rate
on people making more than $250,000 per year. Obama's
plan, projected to cost $85 billion a year, would be funded
by raising the capital gains rate and closing some corporate
tax loopholes.
-RETIREMENT: With Social Security projected to run
out of money in the next 40 years, Obama and Edwards
say they would consider increasing the level of income
that is taxed to provide benefits. To fund the system,
the government currently assesses a 6.2% tax on incomes up
to $97,500. Clinton has refused to say whether she
would support that idea. But to address the issue of
retirement security, she recently rolled out a $25
billion-per-year program to help individuals set up plans by
offering a federal match of up to $1,000 per person.
She says she would pay for the plan by freezing the
estate tax at 2009 levels.
REPUBLICANS:
-IRAQ WAR:
Giuliani, Romney, Thompson, and McCain say they favor a
protracted military presence in Iraq, requiring tens of
billions of dollars of continued spending. The U.S.
currently spends about $10 billion a month in Iraq and
nearly $2 billion a month to fight terrorism in
Afghanistan and elsewhere.
-TAX CUTS:
All four would preserve Bush's cuts. The Congressional
Budget Office has estimated it would cost the
government $2.3 trillion from between 2008 and 2017 if
the expiring tax provisions were extended.
McCain, who has a
long record as a spending hawk, voted against Bush's
2001 tax cuts but now says they should be extended because
doing otherwise would amount to a tax increase.
Recently, the
candidates have been challenged on the issue of the
alternative minimum tax. Originally introduced in 1970 over
concern that wealthy families were able to avoid
paying federal income taxes, the AMT has never been
indexed for inflation and has begun to snag millions of
middle-class taxpayers.
In a debate on
economic issues last week, Thompson advocated indexing the
AMT for inflation and phasing it out altogether over time.
But that would cost the government $621 billion in
revenue over the next 10 years, say the CBO and the
Joint Committee on Taxation.
Romney has said
he would eliminate taxes on interest and dividends for
families earning less than $200,000 annually, which the
campaign says would cost $32 billion. Aides say it
would be paid for through economic growth and by
holding nondefense, discretionary spending to inflation
minus one percentage point.
-HEALTH
CARE: Giuliani, McCain, and Romney have proposed making
health care more affordable but have avoided assigning
a price tag.
McCain was the
most ambitious of the three, focusing on cost containment,
treating chronic diseases and providing tax subsidies to buy
insurance. When he unveiled the plan last week, McCain
acknowledged that he didn't know how much it would
cost, but aides said it would be paid for by ending a
provision in the tax code that lets employers deduct the
cost of health care from their taxable earnings.
Giuliani also
offered no cost estimate for his health plan, which would
provide tax credits to help individuals pay for insurance
rather than relying on employers to do so.
Romney has said
his plan is revenue neutral. It would spend existing
resources and reroute federal dollars to the states to cover
the uninsured with private insurance. He has distanced
himself from a major initiative passed in
Massachusetts while he was governor that requires all
residents to buy health insurance. (Beth Fouhy, AP)