Bush Yet to Flesh Out Domestic Agenda

[papau]

http://www.latimes.com/news/nationworld/nation/la-na-agenda23aug23.story

Bush Yet to Flesh Out Domestic Agenda
Many likely small steps in taxes and savings would add up to 'radical change,' analysts say.
By Warren Vieth
Times Staff Writer

August 23, 2004

WASHINGTON — <snip>Bundled within overlapping themes of tax reform and economic "ownership," they say, are initiatives that would, if enacted, move the country toward fundamentally different systems of taxation and social insurance.

Wage income would be taxed at something close to a flat rate instead of today's graduated rates. Investment income would be largely tax-free. And individuals would shoulder more of the risk for their retirement, in return for potentially greater rewards.

"If you tell liberals that we're going to have a flat tax, that's like putting a cross in front of a vampire: They start cringing," said Stephen Moore, president of the Club for Growth, a conservative fundraising organization. "By doing these things in little bitty steps at a time, it's sort of like a slippery slope, but in the right direction." <snip>

Analysts and advisors, including some who have been conferring with the administration, said the president's short list of second-term priorities would probably consist of:

• Making first-term tax cuts permanent instead of letting them expire at various points over the next seven years. The cuts include lower income-tax rates, expanded breaks for married couples and families, reduced taxes on dividends and capital gains, bigger corporate tax deductions and a phased-out inheritance tax. Cost: about $1 trillion over 10 years.

• Allowing workers to divert a portion of their Social Security payroll taxes to new individual retirement accounts over which they control the choice of investments. Like 401(k) plans, their future value would depend on market performance, not government guarantees. Cost: $1 trillion over 10 years to maintain promised benefits.

• Scaling back the alternative minimum tax, which was instituted to ensure that wealthy filers wouldn't be able to shelter all of their income from taxes, but has begun to bite at the middle class because of income inflation. Cost: perhaps $500 billion over 10 years.

• Creating new vehicles — including lifetime savings accounts and retirement savings accounts — for reducing future taxes on savings and investment. Cost: minimal over the first 10 years, but increasingly large as future earnings are withdrawn.

• Expanding health-savings accounts, which allow Americans to accumulate money tax-free for future medical expenses, and creating similar homeownership tax breaks, such as credits for first-time buyers. Cost: uncertain. <snip>


Robert B. Reich, labor secretary under President Clinton, said he viewed Bush's ownership agenda as new packaging for a collection of old ideas that would widen the gap between rich and poor."Ownership implies the middle class has some savings with which they can own something," said Reich, a Brandeis University professor and advisor to John. F. Kerry. "The stark economic reality is: America's middle class has no savings."<snip>

http://www.nytimes.com/2004/08/22/politics/campaign/22repubs.html

Bush Promises to Offer Detailed Plans at Convention
By ADAM NAGOURNEY

ASHINGTON, Aug. 21 - President Bush will present what aides say will be a detailed second-term agenda when he is nominated in New York in 10 days, part of an ambitious convention program built on invocations of Sept. 11 and efforts to paint Senator John Kerry as untrustworthy and out of the mainstream.<snip>

Mr. Bush's aides declined to provide details of what the president would say, other than to say he was likely to lay out plans dealing with health care and probably tax reform. But they claim that his agenda would be more sweeping and ambitious than the modest scale initiatives that Mr. Clinton rolled out when he ran for re-election in 1996.<snip>