It's All In Who Does the Cutting

President Bush's proposed tax cuts would send billions of dollars to America's wealthiest taxpayers, while providing little help for working-class Americans.

Bush would cut the 39.6% and 36% brackets to 33%, the 31% and 28% brackets to 25%, but leave the 15% bracket unchanged. He would also create a new bracket that would levy a 10% tax -- instead of 15% -- on the first $6,000 a person makes, or $12,000 for couples. But Glenn Kessler of the Washington Post on Feb. 7 noted that a single mom making $25,000 pays at most a few hundred dollars in federal income tax, so that would be the extent of her tax cut -- but she pays $1,912.50 in Social Security and Medicare payroll taxes, which Bush's plan does not address. The Congressional Budget Office reported that 80% of working Americans pay more in payroll taxes than they do in income taxes. If Congress wanted to help the working stiff, it could raise the $76,200 limit on income subject to Social Security tax and reduce the 7.65% FICA rate or exempt lower levels of income to make the payroll tax more progressive.

Or, as the Democratic leadership has proposed, Congress could provide a credit for Social Security taxes, which would effectively reduce the payroll tax without hurting the old-age retirement program. While Bush would not reduce the 15% bracket, Democrats would reduce only that bracket, most likely bringing it down to 12 or 13%, House Democratic Leader Dick Gephardt said. A cut in the 15% bracket would still provide a tax cut even to the very rich, but it would be limited -- only about $1,300.

Though Bush says his tax plan is "across the board," at least 50% of the benefits would go to the wealthiest 5% of the population, the Congressional Progressive Caucus noted. Bush and his supporters say that wealthy Americans pay more taxes, so they should get more tax breaks, but Citizens for Tax Justice noted that the wealthy also profited disproportionately from the booming '90s, when income of the top 1% of taxpayers rose 40.9% to an average of $915,254, while income of the lowest 40% increased less than 4%, due in part to fiscal policies designed to hold down wages. The Progressive Caucus proposed a People's Dividend, which would give every man, woman and child a flat $300 per year annually at a cost of $900 billion over ten years.

The Wall Street Journal noted that members of the Bush administration would do well under Bush's tax cut plan. Using 1999 tax returns -- the most recent released, Bush would save somewhere between $20,000 and $60,000, and Cheney more than a quarter-million dollars. If the estate tax were also repealed, the Journal reckons Bush's heirs would save between $6 million and $12 million, while Cheney's legatees would be spared $10 million to $45 million. And, Scott Shuger of noted, 14 of 17 members of the Cabinet would also die happier. All but about 2% of estates in the US already are exempt from the tax.

The Post noted Feb. 7 that even as business leaders rallied behind President Bush's tax cut plan, lobbyists representing dozens of companies and industries vowed to seek special tax breaks for corporate America. Lobbyists complain that the great majority of Bush's cuts come from reductions in federal income tax rates paid by individuals, with little left over for special benefits for business.

Corporate America pumped some $134 million of "soft money" donations into Republican coffers in the recent election, more than twice what it gave Democrats, the Post's Dan Morgan and Charles Babington noted. Four major accounting companies, whose Washington tax lobbyists represent dozens of influential business clients, were among the top 20 donors of individual and political action committee contributions to Bush last year, according to the Center for Responsive Politics.

W. Henson Moore, president of the American Forest and Paper Association, is co-chairman of a coalition pushing to reduce the corporate income tax rate to 25% from the current 35%. The cost, he said, would be "about $6 billion per year per [percentage] point." Technology companies want Congress to allow faster depreciation of computers and other capital equipment, Microsoft Corp. wants corporate customers to be allowed to write off software purchases as a regular business expense and multinational companies want to revive provisions in a 1999 tax bill vetoed by President Clinton, which would allow them to increase their foreign tax credits through a complicated reallocation of their worldwide interest deductions.

The budget wrangling ought to put to rest talk of a "honeymoon" for Bush. "There is going to be one hell of a fight over this and there should be,'' House Democratic Whip David Bonior of Michigan was quoted Feb. 8 by Reuters. "George W. Bush is not going to be able to charm himself into a big tax cut,'' said Rep. Stephanie Tubbs Jones, D-Ohio, and member of the Congressional Black Caucus. "I think the White House and Republicans up here have underestimated the resolve by Democrats to take them on,'' said Sen. Paul Wellstone, D-Minn.

The normally smooth-running Bush PR machine veered into the ditch on Feb. 8 when the White House flip-flopped during the course of a few hours over whether offices on AIDS and race relations would be closed. Chief of Staff Andrew H. Card Jr. told USA Today that White House offices devoted to those issues would be closed, but a few hours after the newspaper hit newsstands Feb. 7 Bush's press secretary Ari Fleischer was telling reporters that Card had simply been wrong. Bush, at a White House event to press the case for his proposed tax cut, had to digress: "We're concerned about AIDS inside our White House, make no mistake about it," he said. "And ours is an administration that will fight for fair and just laws in the country." But activists wondered whether Card's comments indicated that the White House had been moving in the direction he outlined, then "hit the brakes" as administration officials fretted over the symbolism of that course and the reaction to it, the New York Times reported.

DEMS BLAME GAME CONTINUES. The Democratic Leadership Council continued its campaign that Al Gore "lost" the election because he wasn't centrist enough, while progressive activists insist that Gore faltered because he muddied the distinctions between him and George W. Bush. Of course the dispute overlooks the fact that Gore won the popular vote by more than a half million votes and media examinations of disputed ballots suggest that the Democrat would have won in Florida as well if the US Supreme Court had not stopped the counting (see story below).

At a Jan. 24 panel discussion, the Washington Post noted, DLC chairman Al From said "The New Deal political philosophy that defined our politics for most of the 20th century has run its course," and he concluded, "The New Deal coalition cannot be put back together again." Instead, the party should go after more conservative voters. From said that Gore's showing was not nearly as high as would have been expected coming out of a popular administration during good economic times. "Gore chose a populist rather than a New Democrat message," From told the audience. "As a result, voters saw him as a liberal" &endash;- including moderate voters who turned to Bush. Democrats, he said, must focus more on high-tech workers than blue-collar workers; more on efficient, accountable government than all-purpose government.

Steve Rosenthal, the AFL-CIO's political director replied that Gore's populism gave him his only lead in the campaign's closing months, starting with his convention speech that "gave him the biggest boost he got in the campaign." Overwhelming Gore support from union members &endash;- many of whom are conservative on social matters such as gun ownership -&endash; proved that voters will respond to "a strong, populist message," Rosenthal said. Successful Democratic candidates must inspire enthusiasm from the party's liberal and centrist wings alike, he said. "We hope the New Democrats will be reliable allies with us."

From played down the impact of Ralph Nader's populist Green Party presidential campaign. Nader, vilified as a "spoiler" by many Democrats, won nearly 3% of the popular vote nationwide and more than 97,000 votes in the state of Florida. But From wrote in the DLC's report that Nader's marginal vote did not hurt Gore because "When exit pollers asked voters how they would have voted in a two-way race, Bush actually won by a point. That was better than he did with Nader in the race."

Nader, who attended the forum as a spectator, was asked why he thought Gore had lost the election. According to the Environment News Service, Nader replied, "He didn't lose. He really didn't lose. The real question is, 'Why wasn't he more victorious than he was?'" Nader said that Gore "didn't project authenticity" during the campaign, and that he "didn't project conviction and take a real stand" on issues that mattered to American citizens. "He talked populism in a very general way, but he never filled the blanks in," Nader said.

Nader maintains that for the most part, the environmental initiatives that will be undertaken by Bush will not be substantially different from those that would have been put forth had Gore ascended to the White House. Spencer Abraham, Bush's new energy secretary, "cannot do worse than Al Gore did by giving the auto companies eight years holiday from fuel efficiency standards," Nader told ENS. A Gore presidency would have made little difference in terms of biotechnology issues, pesticides and herbicides, and environmentally unsound trade policies such as the North American Free Trade Agreement (NAFTA), Nader added.

Nader acknowledged, however, that "there is a difference" between the two parties regarding public lands issues. The Democrats, Nader said, do not share the public lands views advocated by Gale Norton, Bush's nominee for Interior Secretary.

Still, Nader told ENS that he harbors no regrets about his entry into the presidential race, explaining that "our goal was a long range political reform movement, and you build that in steps. It doesn't come overnight."

Nader said that the Green Party will provide millions of disaffected progressive voters with a "political home," and he promised a "geometric increase" in the number of candidates that the insurgent party will run in coming elections.

US Rep. Jesse Jackson Jr. D-Ill., told ENS that he "could not disagree more" with the DLC's assertion that Al Gore's failed presidential bid means that the Democratic Party needs to move to the political right. "The present DLC attitude and disposition as evidenced by the [report] ... will only strengthen the Green Party in 2002 and 2004, and will therefore spell certain national disaster for the Democratic Party once again."

Jackson blamed the DLC for pushing policies such as NAFTA and the passage of Permanent Normal Trade Relations for China, both of which he said strengthened Nader's position in the past election. Conservation groups were largely united in their condemnation of those initiatives, maintaining that they would foster an economic "race to the bottom" that would lead to widespread environmental degradation.

"Almost all of [the DLC's arguments] appear to ignore the reality that Ralph Nader did well in Florida, and that he did well in a number of other states," Jackson said. "So it was not Al Gore's populist message that did him in, but it was the proven history and legacy of conservative Democrats that created a split within the Democratic party that manifested itself in the Nader campaign."

Asked if a combined Gore/Nader vote count was indicative of a hidden "populist majority" in the country, Jackson said, "I think it represents an electoral victory, but I'm not totally convinced that it represents a progressive majority -- and there is a difference."

John Harris of the Washington Post reported Feb. 7 that a few days after Al Gore conceded the 2000 presidential election, he and Bill Clinton argued in what sources close to both men described as uncommonly blunt language over the blame for the election loss. Gore told Clinton that his sex scandal and low personal approval ratings were a major impediment to Gore's presidential campaign. Clinton, according to people close to him, was initially taken aback but responded with equal force that it was Gore's failure to run on the administration's record that hobbled his ambitions.

Harris quoted a senior White House official close to Clinton who scoffed: "I don't think the fact that they lost four out of four debates had anything to do with Bill Clinton."

MONEY MAN WINS DEMO CHAIR. Terry McAuliffe, the prolific fund-raiser for former President Clinton, was picked Feb. 3 as chairman of the Democratic National Committee after his rival, former Mayor Maynard Jackson, withdrew to accept a position as chief of the party's new Voting Rights Institute. Jackson also will direct party-building efforts. Atlanta's first black mayor, Jackson had threatened an intraparty battle when the DNC's 90-member Black Caucus, representing about 20% of the committee's total membership, endorsed Jackson, who contended that McAuliffe's skills as a money raiser may not translate into the kind of skilled leadership and grass-roots organizing the party needs. After McAuliffe's selection, the Associated Press reported, Jackson said in a statement, "I look forward to continuing the focus I began in my campaign on rebuilding state parties, election reform and ensuring that no voter and no state is left behind." McAuliffe reportedly is planning to centralize Democratic political operations in a way unprecedented in modern Washington, which has upset some political operatives. In his acceptance speech, McAuliffe said: "We have to win elections. As your party chair, that's my mission -&endash; to win elections. And to win elections, we must create the best run, the best managed, the best organized and the best funded political party in America."

MEDIA RECOUNT FINDS GORE FLA LEAD. If dimpled ballots in Palm Beach County, Fla., had been counted as votes, as Democrats wanted and state law allowed, Al Gore would have picked up 682 votes in that county alone, which is more than President George W. Bush's 537-vote statewide margin of victory, the Palm Beach Post reported Jan. 27. The Orlando Sentinel reported Feb. 11 that Gore would have gained 203 votes in Orange County if ballots that were rejected by scanners but clearly showed presidential preferences had been counted.

The Post examined 4,513 under-votes where the Palm Beach County Canvassing Board decided no vote had been cast but Democratic or GOP observers disagreed. The board set those ballots aside for possible court review, but a sharply divided US Supreme Court intervened Dec. 9 to stop any further review and on Dec. 12 awarded the election to George W. Bush.

Of the disputed ballots, the Post reported, 2,500 had marks -- some faint, some heavy, some with holes but most without -- for Gore. Those with similar marks for Bush numbered 1,818.

That 682-vote gain for Gore would have been in addition to his 174-vote gain found during Palm Beach County's 10-day hand recount ordered by the Florida Supreme Court. Those results, submitted after the Nov. 26 deadline, were not accepted by Florida's secretary of state in the certified 537-vote Bush victory.

The Post also found that the precincts with the most disputed under-votes were not those with a majority of black or elderly voters. They were not particularly Democrat or Republican. But more than two-thirds of the disputed ballots were cast on Data Punch brand voting machines, even though those machines accounted for less than one-third of the 462,644 ballots cast in the county. The Data Punch machines are newer and less costly than the county's other type of punch-card voting machine, the Votomatic. The Post found that it was harder to punch out a chad in a Data Punch machine.

A media consortium also has begun examining under-votes and over-votes in all of Florida's 67 counties. The Miami Herald and USA Today are conducting their own reviews. A Sentinel review of about 10% of the uncounted ballots, focusing on 16 small counties that use mostly paper ballots, suggests that hand recounts would have helped Gore far more than Bush, even though most of the counties are predominantly Republican.

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