A June 28 story on domestic policy proposals by President Bush and Sen. John F. Kerry (D-Mass.) inaccurately reported a cost estimate by Princeton University professor Uwe Reinhardt. His projection for providing health coverage to 44 million uninsured is $100 billion annually. (Published 7/15/04)
As they prepare for the fall general election, President Bush and Sen. John F. Kerry are presenting voters with a clear choice between tax cuts and expanded health care coverage.
The largest domestic policy initiative by far is Kerry's health insurance package, estimated to cost between $653 billion and $950 billion over 10 years. It would provide coverage for an additional 27 million people and have the federal government take over a share of the most expensive, or "catastrophic," illnesses for businesses.
Bush has committed even more money -- about $990 billion over a decade -- for making permanent the array of tax cuts enacted in 2001 and 2003. His more modest ideas for expanding health coverage through tax credits and personal savings accounts would cover about 2.5 million people at a cost of $90 billion.
With so much money committed to each of the candidate's signature issues -- and the war in Iraq -- precious little remains for reducing the deficit or any number of other initiatives both candidates say they hope to address.
"These are pretty stark differences," said Robert D. Reischauer, president of the Urban Institute and former head of the Congressional Budget Office. "Kerry is expansive and wants to preserve and strengthen the role government has played in the economic and social life of the republic, and Bush would like to scale back the role of government to the most basic services of protection of life and liberty and a safety net for those who really have no ability to care for themselves."
Bruce Bartlett, a conservative economist with the National Center for Policy Analysis, offered a similar analysis. "Maybe that should be the campaign slogan: If you want slightly higher taxes and more federal spending on health care, vote for John Kerry," he said.
Compared with previous elections when Social Security, prescription drugs, welfare and the budget were debated in great detail, voters come November will confront a relatively narrow domestic policy menu.
Bush has enacted several of his domestic priorities and has structured his 2004 campaign around defending accomplishments such as the Medicare prescription drug package, the No Child Left Behind education law and the anti-terror USA Patriot Act.
Domestically, Kerry remains focused on the economy; even his health care program is being marketed as an antidote to the squeezed middle class and relief for businesses facing double-digit premium increases. The plan would expand existing government health programs, such as Medicaid, offer tax credits to purchase private insurance and allow individuals and small businesses to buy into the insurance plan given to members of Congress.
The amount earmarked for his health plan far exceeds his $200 billion education initiative and dwarfs other proposals, from energy research and environmental restoration to national service and technology development.
The Kerry initiatives would be financed by rolling back Bush's tax cuts for households with income of more than $200,000. Under the plan, the top two tax rates would rise from the current 33 percent and 35 percent rates to the 36 percent and 39.6 percent rates that were in effect when Bush came to office. The deep cuts in tax rates on capital gains and dividends would also be reversed for upper-income households, and the estate tax would not be repealed in 2010, as is currently scheduled. Those changes should generate about $860 billion, according to the Tax Policy Center, jointly run by the Urban Institute and the Brookings Institution.
"On the domestic side, this is likely to be the biggest area of policy difference between these two campaigns," Emory University health economist Kenneth Thorpe said of the tax cut-health care divide. "And it's not going to be an area where one can nuance the differences." Thorpe, who worked in the Clinton administration, has produced economic models estimating the cost and reach of both candidates' health care proposals.
The Bush campaign has questioned whether Kerry can pay for his health care plan without raising taxes. Republicans also point out that Bush has already delivered a major health care initiative, one that will cost more than a half trillion dollars over the next decade, in providing seniors a new Medicare drug benefit. Bush advisers also say the election is about more than choosing between health care and tax cuts.
"It's not a binary choice," said Bush campaign spokesman Terry Holt. "Tax relief provides growth for the economy, and economic growth not only brings more revenue to the government, but also affords people more choices with their own money. It's just false to assume you have to make a choice between giving people tax relief and providing health care reform."
Republican strategists say they do not intend to allow Democrats to frame the election as tax cuts for the rich vs. health care for everybody else. Stephen Moore, president of the conservative political action committee Club for Growth, said Bush will instead portray the election as tax cuts vs. big government, then savage Kerry's health care plan as a return to the Clintons' disastrous health plan of 1993.
For their part, some Kerry advisers also bristle at what they see as an oversimplification that gives short shrift to the Massachusetts senator's other proposals, especially his pledge to tackle the budget deficit. But Sarah Bianchi, Kerry's domestic policy adviser, said health care has become such a pressing issue -- for both businesses and workers -- that it will motivate voters.
"In terms of a big contrast, if the voters go to the polls on Election Day thinking that's the basic choice, that's great for us," she said. "If it's an honest debate between health insurance and tax cuts for the wealthy, we say, 'Bring it on.' "
Jeff Lemieux, executive director of Centrists.Org, a small bipartisan think tank, said both campaigns are promising more than they could likely deliver. "It's unlikely we're going to repeal the tax cuts for people over $200,000," he said. As for Bush's plan, Lemieux said, "The idea of making these tax cuts permanent has no particular economic stimulus rationale."
With nearly 44 million uninsured Americans, both candidates are eager to say they have an answer to a problem that has bedeviled policymakers for more than a decade. Their approaches differ dramatically.
Uwe Reinhardt, a professor at Princeton University's Woodrow Wilson School of Public and International Affairs, said covering every American would cost about $100 billion over 10 years. Kerry's "multi-pronged" approach is "kind of a 70 percent solution," he said. Bush has a "10 percent solution."
That analysis is based on a big-government philosophy that relies on "throwing more money at the problem," replied Megan Hauck, deputy policy director of the Bush campaign.