Bush has been trying to contrast his tax cut plan with Gore's on the stump for more than a month, now, and got it wrong again in Florida. "George W. Bush likes to accuse rival Al Gore of ``fuzzy math'' when denouncing GOP tax-cut plans, but on Saturday Bush practiced some of his own. During a question session at a community college, Bush sought to explain how certain lower middle income earners can wind up paying a higher overall tax rate than the wealthy under existing law.

``If you're a single mother making $22,000 a year and, say, trying to raise two children. One: you're working the hardest job in America. Secondly, for every additional dollar she earns, she pays a higher marginal rate on that dollar than someone making $200,000 a year. She starts to lose her earned income tax credit. For the first time, she's in the 15 percent bracket. When you add another 15 percent payroll or 16.2 percent payroll tax on top of that, plus the 2.9, the payroll tax and the Medicare tax, 16.4 percent. You end up, uh, you end up with a high marginal rate. And that's not right and that's not fair. And we're going to do something about it.''

"As the audience applauded, Bush softly asked his brother, Florida Gov. Jeb Bush, ``Does that add up?'' Jeb Bush shrugged. Bush then took another stab, saying, ''15.3 percent, 12.4, 2.9. I was trying to do some fuzzy math."" --AP, 10/7/00

In the debate the other night, Gore pointed out that Bush wants to pay out the $1.3 trillion in tax cuts immediately, but wait four years before providing a price break on prescription drugs to 95% of our seniors. This is a plan similar to what Bush did in Texas during his present term. The very first thing he did as governor was to declare an emergency and provide a tax cut to the oil industry. Not surprisingly if you've been following Bush over the years, one of the largest single beneficiaries of the oil tax cut was Richard Rainwater, a Dallas billionaire who made millions for Bush by bringing him into his various financial projects. Dick Cheney, as head of Texas' Halliburton oil, was another recipient of Bush's emergency oil tax cut largesse.

But there's something more that troubles us about Bush's priorities. Although he says a quarter of the surplus will go to fund social programs and a quarter will go to fund his tax cuts, the reality is that less than 1/8 will fund his social programs and $280 billion dollars plus 1/4 will go to fund his tax cuts. When you factor in the interest on the tax cut money paid out, Bush will be spending 1/3 of the surplus on an up-front tax cut, 44% of which will go to the wealthiest 1% of our citizens.

Now here's the kicker. Most economists don't believe there will be a $4.6 trillion surplus, because the figures are based on the assumptions that the economy will continue to grow as it has been doing during the Clinton-Gore years, no new programs or projects will be added, and inflation will remain at the present rate. Further, history does not suggest that cuts in other programs will pick up the slack. What this means is that when the time comes for Bush to find the money for his social programs, there won't be any money left. The bottom line, then, is that the billionaires will get billions back in tax cuts, while the average worker will not see the added social programs like perscription drugs, education, and healthcare that Bush has promised. As he demonstrated in Texas, Bush's priorities are to make sure his wealthy friends and corporate backers get theirs, and then tell the less fortunate average voter that the money's all gone. Sorry. Bush should promise now that he were to be elected he would fund his social programs first by admitting he's only spending 1/8 of the surplus on them and then putting that money in a lock box. Then he should wait until the end of his term to see if there's enough money left to reward his wealthy friends with tax cuts. --Politex, 10/5/00

Because the numbers aren't there. It's that simple. So much of Bush's campaign has now become a repeat of his two Texas gubernatorial contests. For example, in his first Texas campaign he accused Governor Richards of letting the criminal justice system decay, and one major issue of the campaign was how he would become governor and fix it. When he became governor he decided he was wrong and it didn't need fixing all that much. (See note below.) On the national level he's now doing the same thing with military readiness. His tax cut plan is another example. As on the national level, most voters wanted to pay down the debt, not get a tax cut that would benefit the wealthy and only give the average family an extra hamburger and coke a month. As on the national level, the tax cut was done for political purposes and was based on questionable bookkeeping. One big difference, however, is on the national level economists are regularly pointing out Bush's incorrect assumptions about our projected budget surplus, without which there will be no tax cuts. In fact, as the most recent study has it, Bush tax cuts would produce "a trillion dollar deficit. And that's assuming that nothing goes wrong." Here are the highpoints of a study by UCal's Alan Auerbach and William Gale of the Brookings Institute, as reported by economist Paul Krugman in the 8/24 NYT. --Politex, 8/25

"The true surplus right now is around $20 billion. So our political debate is based on projections saying that in the years ahead the federal government will run average annual surpluses about 10 times as big as this year's actual surplus. Doesn't that sound a bit like counting your chickens before they've hatched?... If you put Medicare and federal pensions into the "lock box" along with Social Security -- and what politician would admit that he plans to raid those funds? -- you immediately slice $800 billion off those future surpluses. That still leaves a pretty big projected surplus. What drives that projection, however, is the assumption by the Congressional Budget Office that "discretionary" spending -- spending that, unlike Social Security, Medicare, or interest on the debt, is not mandated by existing law -- will stay at current levels for the next decade. If spending stays constant while a growing economy increases tax receipts, the eventual result will indeed be a big budget surplus.

"But while Congressional budgeters are obliged to pretend to believe what Congressmen say, the truth is that demands for government services grow with the economy: more air traffic to control, more homes to protect from forest fires. I know, I know -- you're going to insist that the government is too big as is. Let's roll back discretionary spending, now a bloated 6 percent of G.D.P., back to what it was in 1960, when it was only . . . actually, it was about 12 percent of G.D.P. True, most of that was defense spending. In fact, half of discretionary spending still goes for defense. That means that, given the clamor for a stronger military, it will be all the harder to hold overall spending constant. By the way, non-military discretionary spending as a percentage of G.D.P. is now at its lowest level since 1962.

"So the realistic projection is that discretionary spending will grow at least as fast as G.D.P. Indeed, if we're going to have a military buildup, keeping discretionary spending from growing faster than G.D.P. will require substantial cuts in government services. Assuming that discretionary spending does grow with the economy, the Auerbach-Gale paper projects a surplus over the next decade of only around $350 billion -- not even enough to make room for Al Gore's tax cuts, let alone Mr. Bush's. (Mr. Bush's cuts would produce a trillion-dollar deficit.) And that's assuming that nothing goes wrong -- no recession, no military emergency. The paper goes on to argue that if you take account of the demands on federal funds that will come when baby boomers retire, we are actually in long-term deficit." Get the picture?

Note: "In 1994, when he was a baseball executive running for governor, George W. Bush led off his television campaign with an ad that hit hard on crime. 'In the last three years 7,700 criminals have been released early from prison,' Bush said then.'I will end early release of criminals and end parole altogether for rapists and child molesters.' Six years later -- as a governor running for president -- that approach could come back to haunt Bush as state prisons near capacity and his parole officials are issuing more and more get-out-of-jail-early cards." --Ken Herman

BUSH TANGLES TONGUE ON TAX TALLY OF TRILLIONS

Is This Our Future? "He...read no books, knew no history. Nevertheless, full of (Texas) charm, he could "communicate"...on TV whatever message had been crafted for him,...(like) let's cut the capital gains tax for the rich as well as any tax on corporate profits because a rising tide sinks all boats, or whatever the conventional wisdom was....In (Bush), the masters of the media had found their most obliging President. Whatever corporate America wanted, corporate America had finally got. Small marginal lefty papers like The Nation might mock this beloved paladin of all that was good in America, shining upon its hill, but for eight years no one was allowed to give the game away. We were told he was on top of everything; he was widely read; with an innate instinct.... Finally, he had a sense of fairness that included even the downtrodden 1 percent that owns most of the wealth of the country as well as a lot of that of the rest of the world. It took a man of saint-like compassion to realize that when taxed the rich feel pain, bleed...The myth...was furiously sustained on all sides. Gore Vidal, 9/26/99

One of the many ironies of the Bush campaign is that he not only visits schools and calls for more reading programs and more phonics, but he also models an inability to read and speak while doing so. Given the major math mess he recently made in one more attempt to describe his tax plan, will he propose that more arithmatic be added to school curriculums? Bush's tax plan problem is actually two-fold. First, he can't describe it. Secondly, if he could, it would be seen as wrong. The bottom line is that it's based on a surplus that doesn't exist and, according to economists, most likely never will. --Politex, 8/24

1. Bush's Explanation of His Tax Plan. "Between now and the next 10 years, our budget's going to grow from roughly $1.9 billion to an additional spending of $1.9 trillion to an additional spending of $3.3 trillion. That's before we even account for the surplus. We will spend $3.3 trillion over the next 10 years on top of a $1.9-trillion budget. We've still got trillions of dollars left of the surplus, and surely we can give some of the money back to the people who pay the bills. Surely, surely we can."

2. Bush's Second Attempt to Explain His Tax Plan. "I've got to do a better job of making it clear that starting with a baseline of about $1.9 trillion in the next 10 years, the budgets will increase by about $3.3 trillion. And yet we've still got another $2.3 trillion of surplus."

3. A Bush Spokesperson Explains What Bush Has Been Unable to Explain. "The current federal budget is about $1.8 trillion. Over the next 10 years, inflation and expansion of existing government programs will cost $3.3 trillion more. But at the same time, the federal budget surplus will be an estimated $4.6 trillion. If Bush were president, half of that surplus would go to save and secure Social Security. And $1.3 trillion more would go to the tax cut. And that would leave just under $1 trillion for programs covering everything from education to improving military housing." (LAT 8/23)

Tomorrow. Why the Bush Spokesperson is Wrong.

George W. Bush's payback of his campaign contributors has begun. Part of the Bush tax cut plan created by Reagan/Poppy economists is to elminate estate taxes. Last July Bush called the House-passed tax bill which included elimination of estate taxes "in the right direction," wrote Matthew Miller in an LA Times syndicated column, "thereby tacitly endorsing a sop to wealthy heirs--including himself and his kids." What Miller was talking about was the Republican plan to eliminate estate taxes, a plan he thought was filled with "deceit, injustice, and hypocrisy."

To listen to Bush today, "you'd think an estate tax phase-out was mainly about saving 'family farms,' said to face onerous burdens once Dad and Mom pass on and the taxman cometh....That's a nice sound bite, but it's also a fraud. The first $650,000 of an estate is exempt from taxes." This covers 98% of the estates in the country, leaving the elimination of the estate tax only benefiting the richest two percent in the country. "The depth of [Bush's] duplicity here is thus stunning. Under the guise of a populist reform, [he] would allow the wealthiest handful in our society to avoid an estimated $330 billion in taxes over the next decade--a gap that would likely end up being plugged by new levies on the middle class," opines Miller.

An estate tax loophole that's already in place costs taxpayers $25 billion per year. Say, your Dad bought 100 shares of Microsoft at $30 a share years ago and the price is now $200. If Dad dies and leaves you the stock, you pay estate taxes on $30 a share, not the capitol gains run-up in value. This has led conservative economist Irwin Stalzer of the Hudson Institute to conclude that it's a contradiction for economic conservatives like Bush to be against both affirmative action and estate taxes because if "you're against giving certain groups unfair advantages in life because of an arbitrary trait like race, how can you be in favor of preserving unfair advantages for certain other groups because of an arbitrary asset like rich parents?"

If Bush really wanted to support the entrepreneural spirit he claims he's for, one would think he would want to do so by "raising taxes on big estates and using the revenue to cut marginal tax rates for everyone," concludes Miller. Of course, that will never happen, for two reasons. First, Bush has fallen in lock step behind the House and Senate GOP in his campaign for the White House. (He's even speaking in GOP tongues: "I support getting rid of the death penalty" means he's against estate taxes. (See Slate 7/22/99 .) "Secondly, the 300 (mostly unnamed) "pioneers" who have contributed to and organized his campaign money machine are the ones with the big estates that want such taxes eliminated. 12/2/99

Notes:"If you're in the top earning bracket ($837,000 average) your Bush additional tax cut comes out to .051% ($50,000). If you're earning $30,000 your Bush additional tax cut percentage is less, .016% ($50l). If you're earning poverty wages you get no relief at all. You still don't pay taxes and you still pay the same payroll taxes. The money for the Bush plan would come from a projected annual surplus of 2.7%, higher than government estimates, and it assumes no new spending and no paydown of the national debt. Just as in Texas under Bush and based on the the percentage of the reduction, the major beneficiaries are the wealthiest, the middle class gets considerably less, and the poorest get nothing. Further, like Texas, the surplus is based on questionable projections and the government's back bills are not paid.

In Texas additional local taxes that came about as a result of the State's reduction of services because of the Bush tax cuts left the average wage-earner breaking even or being taxed more than before. Under Bush's plan this would likely happen at the national-state level, leaving Texas either to increase its taxes or, more likely, further decrease its social services. The result is to continue the growing trend in this country of putting greater percentages of wealth into the hands of fewer people. ("By 1997, the top 10 percent of the population owned 73.2 percent of the nation's net worth, up from 68 percent in 1983."--Ivins)

These people use that wealth to benefit candidates who support their methods of gaining wealth, including funding those candidates who will serve them or who are one of the wealthiest, themselves. For example, less than 1% of the voting population has been responsible for all presidential campaign contributions. 76% of Bush's campaign contributors have given the maximum of $1,000 to his campaign. Around 300 of his wealthier backers have provided the lion's share of these $1,000 contributions by collecting 100 plus maximum contributions to gain greater considerations if Bush were to be elected president.

"Rudy Penner, who headed the Congressional Budget Office under Presidents Ronald Reagan and George Bush, said he is hesitant about supporting the governor's plan because "we face this very huge burden of Baby Boomers, and we would be well-advised to pay down as much of the debt as we can." The national debt is now at $3.6 trillion, in a $9 trillion economy. Penner said that if the numbers are off or the economy doesn't perform up to snuff, "the debt could explode" as more Baby Boomers retire in the 21st Century. This could drive up interest rates, he said, and lead to an economic calamity. The former CBO director also said Congress has used gimmicks in the current budget to hide big increases in discretionary spending--or spending other than for entitlement programs such as Social Security. From defense to education, from highways to the environment, he said, Congress is quietly yielding to spending pressures, and then trying to mask it."

SMOKING GUN? $173 MILLION IN FED FUNDS FOR CHILDRENS' WELFARE SHIFTED INTO GENERAL FUNDS (AGAINST FEDERAL REGULATIONS) TO COVER PART OF BUSH $1.7 BILLION TAX CUT.

Records show legislators admit that if their plan was unacceptable to the Feds after the fact, they would stall until the 2001 session. Meanwhile they would face a "potentially hobbling state government with a monumental budget shortfall." They were willing to risk all of this to provide Governor Bush with the largest tax cut possible to be used as a presidential campaign issue. What did Bush know and when did he know it? --Politex, 7/27/00

"During the House Appropriations committee meeting of March 19, 1999. Chairman Robert Junell, , D-San Angelo, committee members and Health and Human Services Commissioner Don Gilbert openly discussed shifting $173 million of Temporary Assistance for Needy Families money and using it to pay for things normally funded from the state's general revenue fund. Junell is one of several prominent Democrats who endorsed Bush's 1998 re-election bid. "Ultimately, all the general revenue that's freed up in DHS (Department of Human Services) gets spent in other strategies," Junell explained. "But we've supplanted it with more federal funds at DHS." But there was risk, which also was discussed, that the required federal OK wouldn't be given. "We've worked long and hard trying to find a way to move this (money) into programs that we think are justifiable," Gilbert said, "and we can, in the process, free up the GR (general revenue) that's been mentioned here."

"But federal approval wasn't guaranteed, he admitted, and "it's awfully hard to predict with any certainty what the feds will do." "But other large states are doing similar things?" asked Rep. Kyle Janek, R-Houston. "We have from the governor's office and LBB (Legislative Budget Board) indications that other states are doing things like this," Gilbert replied. "But I'd hate to say that any one state has done exactly, or in the same proportion, what we're doing." Not only did the committee — and ultimately, the Legislature and governor — proceed with the risky shift, they also discussed how they would respond if federal officials disallowed the shift, potentially hobbling state government with a monumental budget shortfall.

"And the risk is that the feds come back and say no," mused Junell. "Then our only risk is to be able to put off a definitive 'no' long enough for the Legislature to come back" in 2001. "That's right," Gilbert responded. "We would suggest that there are ways to appeal this and drag it out. We think that we can stall this thing long enough to get the Legislature back in the next session." "Should this have a contingency rider" in case federal officials disallow the money swap, asked Rep. Dianne White Delisi, R-Temple. "The problem is that if you have a contingency rider," Junell replied, "it's hard to argue with Washington that 'gosh, we can't do anything about it because the Legislature's not meeting.'" --Carlos Guerra (more), 7/27/00

TEXAS MATH. "Texas began 1999 with a record surplus of $6.4 billion, which legislators used that year to raise teacher pay and increase spending on other education and health programs. They also used $1.7 billion of the surplus for the tax cut that Bush proposed....Republican state Comptroller Carole Keeton Rylander...stepped into the budget fray Thursday, officially confirming that state government will have a surplus of $1.4 billion by Aug. 31, the halfway point of the state's 2000-2001 budget period.... The Houston Chronicle reported earlier this month that legislators likely will need to tap the surplus to cover unexpected expenses totaling about $610 million in some state programs. [This has been acknowledged by the Bush camp.] Rylander noted that the surplus would be more than enough to cover the overruns....This year, the state could lose $449 million in federal funding for CHIP because it got a late start in enrolling children." This from today's Houston Chronicle. 610 + 449 = 1,059 from 1,700 leaves $641 million in the state surplus. Agencies are still in the processs of reporting shortfalls, some are trying to figure out ways to move the deficits into the next budgetary period. Although the state has a "Rainy Day Fund," there's next to nothing in it. Our best guess is the Texas budget will end up in the red, which wouldn't happen if the state had the $1.7 billion tax cut that Bush has been bragging about during his presidential campaign. Things could get much worse for the Bush budget if the eligible poor in Texas ever learned about the money that has been earmarked for them and if the state stopped setting up road blocks to prevent them from getting it. --Politex, 7/21/00

TAX CUTS FORCE TEXAS $600+ MILLION OVER BUDGET, BUSH TELLS IT LIKE HE IS.

"I did the right thing. It's a little early to project the amount of money the Legislature will be dealing with, and as you know I hope I'm not here to deal with it. I'm seeking another office." --George W. Bush, 7/13/00

One thing about Bush, catch him in an unscripted moment and his arrogant callousness and general disregard for the average citizen sometimes gets the better of his common sense. As criticism of his remark grows in volume, we wouldn't be surprised if he's asking spin-mistress Karen Hughes, "Wad I do, wad I do?" What Bush did was push for ways to bring his 1999 tax cut up to an even $2 billion, even attempting to take money from workmen's compensation and kindergarten funds at one point. Although he had to settle for $1.7 billion, $1 billion of which was taken from the so-called state surplus, the point was to use the tax cut as political leverage on the presidential campaign trail. This, of course, was done at the expense of the average Texan, and could very well threaten what has been set aside for programs such as health care and education. Not only did Bush's wealthy friends get an unfair share of the tax cut through oil subsidies and property tax write-offs, but the average citizen is now being asked to pay for Bush's political ambitions. True, while it's impossible to project exactly how much it will take to run a state, one is expected to estimate with a financial cushion in mind, just in case. Not only was no such cushion provided, but the actual surplus was over-estimated and nothing was placed into the bone-dry state contingency fund as well. What in the world will Bush and his minions do with a national budget? On the basis of his Texas record, the answer is obvious. Bush will continue to pay off his wealthy friends and campaign contributors, propose tax cuts with money that isn't really there, and carve away programs for the average citizen to pick up the budgetary slack. Nationally, we have a large projected surplus in the trillions, but all but around a trillion has already been allocated for ongoing expenses, leaving just enough for Bush's proposed tax cuts, and nothing else. Bush says he will get the remaining trillions for his proposed programs by cutting back waste. Uh-huh.

Look to what Bush has done in Texas. Now, his Texas friends say the state always has costs overruns, so what's the big deal? The state has never had a cost overrun anywhere near this size, that's the big deal. In effect, Bush's remarks translate to "Hey, screw you, I've got mine and I'm outta here!" As Molly Beth Malcolm, Texas Dem Party head said, ""Bush's whole career has been built on family connections and other people's money. This time he was able to take advantage of the taxpayers' money to further his ambitions. He milked that for all it was worth - so now he's ready to move on. "Bush's idea of leadership has been to take credit for the good times and leave the problems on somebody else's doorstep," Malcolm said. "He's doing that now with the Children's Health Insurance Program and the state budget. It's an abdication of leadership and a galling, cavalier attitude toward the taxpayers of this state." Since we predicted these circumstances and Bush's response over a year ago, we're disheartened, but hardly surprised. --Politex, 7/14/00

OLIPHANT: BUSH'S TAX CUT CLUNKER. 12/6/99
BLAKENHORN: THE FLAW IN BUSH'S TAX PLAN 12/6/99
WP ED: WRONG TO BASE MAJOR POLICY ON "WEAK REED" OF UNSAFE PROJECTION.
WP: BUSH TAX PLAN DRAWS FIRE FROM BOTH SIDES. 12/2/99
HC: BUSH ATTACHED GAG ORDER TO TAX PLAN LEAK. 12/2/99
DMN: IOWANS MIXED ON BUSH TAX PLAN. 12/2/99
AP: BUSH JOINS GOP TAX CUT MAINSTREAM. 12/2/99
USN: BUSH CUT 40% MORE THAN GOP PLAN--WSJ. 12/2/99
IVINS: RICH RICHER, POOR POORER. 12/2/99
AAS: BUSH TAX PLAN LOWERS HIGHEST BRACKET 7%. 12/2/99
AAS: REAGAN, BUSH ECONOMISTS CREATED DUBYA'S TAX PLAN. 12/1/99
CT: BUSH POINTS TO TEXAS TAX RECORD PEOPLE'S TRUST. 12/1/99
WP: BUSH TO OFFER $483 BILLION TAX CUT PLAN. 12/1/99
NYT: ELECTORATE MORE INTERESTED IN HEALTH THAN TAXES. 12/1/99
WT: BUSH TAX PLAN WOULD ELIMINATE ESTATE TAX. 12/1/99
AAS: HOW THE BUSH TEXAS TAX CUT BECAME A NATIONAL MYTH. 9/30/99
AAS: SCHOOL TAXES RISING DESPITE BUSH PROPERTY TAX PLAN. 9/16/99