MORRIS: Liberals and the Election of 1996
It's a challenge to decode this election's favorite curseword: "liberal". on the national level Bob Dole labels Bill Clinton a liberal 14 times in a single speech while in Minnesota Rudy Boschwitz uses the l-word 4 times in one 15 second ad about Senator Paul Wellstone. But a hard look behind the name calling reveals a real difference between Republicans and Democrats about how the government should go about its business.Nowhere is that difference more apparent than in the parties' positions on two key issues: the budget deficit and the growing percentage of the work force earning poverty wages.Both parties agree that the deficit is too large. Under President Clinton a happy combination of vigorous economic growth, significant budget cuts and significant tax increases has slashed the deficit in half. The Republicans focus only on the tax increase. The most widely aired Republican ads accuse Clinton and Wellstone of supporting the largest tax increase in American history.Actually Ronald Reagan holds that dubious distinction with his 1982 tax increase. Nevertheless, it is true that Democrats raised taxes. They believed that a $300 billion dollar deficit could not rapidly be reduced simply by cutting non-essential spending. And they were unwilling to drastically slash spending on education or the environment. A tax increase was part of their solution. What is far more revealing than whether the Democrats raised taxes is how they structured that increase. They required those who had benefited most from the federal tax and spending policies of the 1980s to shoulder most of the burden for cutting the deficit in the 1990s. They followed the recommendation that Jesse Jackson had made back in 1988, "Those who came to the party should pay for the party."And what a party it was. Between 1977 and 1987, the rich reaped virtually all of the benefits of the economic stimulus created by almost $2 trillion in deficit spending. After tax income of the top one percent of the population rose by $130,000, to almost $250,000 a year, according to the Congressional Budget Office. Meanwhile the rest of us fared rather poorly. After-tax income of the lowest 10 percent fell by $350.The Democrats' 1993 budget took a tiny bite out of the remarkable haul the wealthy gained from deficit spending. The richest one percent of Americans saw their taxes increase, on average, by $17,000. However, the far larger number of households who earned less than $17,000 a year, saw their taxes decrease.The Republicans bitterly opposed this strategy. They did so all the way to the final vote. They still do. The Republican proposal for restructuring the tax system is very different. Bob Dole's plan, according to Citizens for Tax Justice, would raise the taxes on the 9 million poorest families by an average of $270 while it would lower taxes on those earning over $200,000 a year by $25,200. The more conservative leaning Tax Foundation believes the rich would make out even better, receiving over $30,000 in tax benefits from the Dole Plan.Republican House Majority Leader Dick Armey believes that the Dole plan does not go far enough. He insists that we abolish all taxes on income earned from investments while increasing taxes on workers and shoppers.Thus on the tax side of the government equation, Republicans and Democrats most definitely disagree. On the spending side of the equation, when it comes to helping the working poor, they differ as well. Here a little history may be in order.Forty years ago conservative economist Milton Friedman proposed a simple yet revolutionary idea. The federal government would tax people with higher incomes and send a check to those with lower incomes. It may be difficult for anyone under 30 to believe this but until Ronald Reagan it was not unusual for a conservative Republican to maintain that the best way to alleviate poverty was to give the poor more money.Friedman's idea became the earned income tax credit (EITC), first implemented by Republican President Ford. In 1992 President Clinton oversaw the program's largest expansion. Today $21 billion a year goes to 18 million working families. The EITC is now larger than federal payments to poor families with small children. The maximum EITC check is equivalent to a $1.70 hike in the minimum wage.When Milton Friedman first proposed his idea liberals like Hubert Humphrey opposed it. But in 1996 it is conservatives, not liberals, that object. Today the Republican Party proposes to cut billions from the EITC. Some have begun to use the dreaded word "welfare" to describe the program.Raising the minimum wage is another strategy for helping the working poor. On this issue Democrats and Republicans have always differed. Back in 1938 that most liberal of all Presidents, Franklin Delano Roosevelt signed the first minimum wage bill. He declared, "No business which depends for its existence on paying less than living wages to its workers has any right to continue in this country." In the 1980s and 1990s Republicans consistently fought against raising the minimum wage even while inflation eroded the purchasing power of the poorest workers. Dick Armey has proposed abolishing the minimum wage altogether.Sound bites and name calling confuse and dishearten voters. But behind the smoke screen very real differences exist between Bob Dole and Rudy Boschwitz and Bill Clinton and Paul Wellstone. Voters would do well to get behind the labels.