Bush and Kerry Vie for Pocketbook Issues
By Thomas Rains
WASHINGTON, OCTOBER 28 – Pocketbook issues have always been of the utmost importance to voters, and while the war in Iraq and the struggle against terrorism may have become pivotal issues in this campaign, the economy remains an important factor voters will consider.
Bush and Kerry have distinct stances on how to deal with the U.S. economy over the next four years, and during the third presidential debate in St. Louis each laid out the their overarching goals on healthcare, jobs, Social Security and taxes. Each used the debate – like candidates have in years past – to distinguish himself from his rival.
According to the U.S. Census Bureau, 45 million Americans, or 15.2 percent of the population, do not have health insurance, an increase of 5 million since 2001. Employers around the country have scaled back or cut out their employee coverage, and insurance premiums have increased since 2001 by more than 50 percent on average.
Each side has addressed this issue with its own plan.
Bush’s plan calls for giving individuals a $1,000 annual tax credit to purchase health insurance and making health savings accounts tax-deductable. These accounts allow individuals to put away money tax-free for health coverage.
“These are accounts that allow somebody to buy a low-premium, high-deductible catastrophic plan and couple it with tax-free savings,” Bush said in St. Louis. “Businesses can contribute; employees can contribute on a contractual basis.”
Bush also advocates medical malpractice reform that would cap medical malpractice awards at $250,000.
However, Kerry’s plan focuses on creating a better prescription drug benefit that would allow for the importation of prescription drugs from Canada, and reimbursing employers who pay for three quarters of the cost of “catastrophic cases” for their employees if they insure all of their workers.
“In the Senate we passed the right of Americans to import drugs from Canada,” Kerry said in the debate. “But the president and his friends took it out in the House, and now you don’t have that right.” Kerry added that Bush “made it illegal – illegal – for Medicare to actually go out and bargain for lower prices.”
The senator went on to explain that his plan would allow for individuals “to buy into the same health care plan that senators and congressmen give themselves,” a proposal which Bush does not support.
Bush and Kerry also disagree over how best to deal with Social Security in the coming years. Federal Reserve Chairman Alan Greenspan announced last summer that Social Security would have to be adjusted for it to provide the same benefits to future retirees that it does currently.
Bush advocates letting citizens put some of the money collected by Social Security into private savings accounts.
“I believe that younger workers ought to be allowed to take some of their own money and put it in a personal savings account, because I understand that they need to get better rates of return than the rates of return being given in the current Social Security trust,” Bush said.
Kerry’s plan is more traditional, fixing the problem through 2075, he says, by repealing some of Bush’s tax cuts. Bush’s plan, Kerry says, is an “invitation to disaster” that would take $2 trillion from Social Security, according to the Congressional Budget Office.
“Just that tax cut that went to the top one percent of America would have saved Social Security until the year 2075,” Kerry said, noting that the Democrats balanced the budget in the 1990s.
One of Kerry’s main campaign points is job creation. He likes to point out that Bush is the first president since the Great Depression to preside over a net loss of jobs. While Kerry often over-simplifies this issue, and while the numbers could change by January, he is correct. Herbert Hoover’s presidential term, from 1929 to 1933, was the last in which the overall number of American jobs decreased.
Bush believes in providing more education and new training for workers who have lost their jobs, while Kerry advocates closing loopholes in the tax code that make it beneficial for companies to move their factories overseas.
“Here’s some trade adjustment assistance money for you to go a community college in your neighborhood, a community college which is providing the skills necessary to fill the jobs of the 21st century,” Bush said, when asked what he would say to someone whose job had been sent overseas. He also said that educating citizens well was the best way to make the economy grow.
Kerry, however, said he would try to make the “playing field” level in the corporate tax system.
“Today, if you’re an American business, you actually get a benefit for going overseas,” he said in St. Louis.
“That’s not smart,” the senator added. “And when I’m president, we’re going to shut that loophole in a nanosecond and we’re going to use that money to lower corporate tax rates in America for all corporations, five percent. And we’re going to have a manufacturing jobs credit and a job hiring credit so we actually help people be able to hire here.”
Taxes are also a major sticking point between Bush and Kerry.
Kerry frequently chides Bush for giving the richest citizens of the country a tax break and causing the deficit to increase dramatically. The senator’s plan calls for rolling back the tax cuts enacted in 2001 on those Americans making more than $200,000 a year, and raising the minimum wage over several years to seven dollars an hour. In addition, the senator has called for reinstating “pay-as-you-go” rules from the 1990s, which require funding plans for how to pay for new spending proposals.
Bush argues that everyone benefited from the tax cuts of the past four years. Specifically, tax credits were given to married people and persons with children. Bush also considers the overhaul of the federal role in education he signed into law to be a job creation act, because theoretically it helps children receive a better education, which in turn helps them get better employment.
The two have elaborated on their own plans and attacked their opponents’ plans. Both Bush and Kerry have set out different economic paths for the country regarding the future of Social Security, health care and job creation, among many other things. And, if things go smoothly, the country will know on Wednesday which path it will follow.
