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NEWS
[ Thursday, Oct. 28, 2004 ]

Platforms and promises 2004
Presidential candidates plan differing economic packages

Collegian Staff Writer

The sluggish economy, steady leak of American jobs overseas and a multi-billion-dollar deficit seem to have made this campaign into a finger-pointing showdown, as each candidate struggles to bash the other's economic record and applaud his own.

Sen. John Kerry believes the American public has fallen short of its highest potential because of a faulty economic policy and a lack of compassionate leadership.

President George W. Bush, meanwhile, champions his own economic success and reminds Americans that they know how to spend their money best.

The focal point of Kerry's plan is the repeal of Bush's tax breaks for the richest 2 percent of Americans. He plans to use the recaptured money to fund programs.

Kerry plans to cut taxes for the other 98 percent of American families and 99 percent of all businesses.

He has said he would give tax credits for up to $4,000 on college tuition and $5,000 on child-care expenses, and would start a program called Manufacturing Business Investment Corporations (MANBIC), aimed to encourage investment in manufacturing companies.

Kerry would also give tax credits to cover payroll taxes for new employees in manufacturing companies and small businesses.

Where they stand
on the economy
Bush
Emphasizes higher education and job training for those losing jobs due to outsourcing.
Keep tax cuts for wealthiest 2 percent of Americans.
No stance on minimum wage yet, but will consider Congress proposals.

Kerry
Wants to close the tax loopholes.
Wants to repeal the tax cuts for the wealthiest 2 percent.
Wants to raise the minimum wage to $7 per hour by 2007.

Bush, meanwhile, plans to continue the economic policies of his first term.

He hopes to make his tax relief permanent. On Oct. 4, he signed a bill that kept most of his earlier initiatives intact, including the $1,000 per child tax credit for families. The bill only extends the efforts for five more years.

Bush stresses the need to restrain federal spending and lower regulation and has applauded the success of the government withdrawal during his first term.

But despite Bush's optimism, Penn State students are worried about finding post-graduation employment -- or at least they should be -- said Jack Rayman, director of Penn State Career Services.

Rayman said the economy seems to be struggling because fewer employers are recruiting PSU students.

"Toward the end of the '80s, we actually topped out at almost 30,000 job interviews per year. That was the highest it's been," he said. "The average is somewhere around 20,000. Last year we were slightly under 14,000. That's the lowest it has been in the 23 years I've been here."

The economic situation especially affects graduates in information technology-related fields, Rayman said. Those jobs are being outsourced -- shipped overseas and given to workers who demand lower salaries and fewer benefits, he added.

Bush and Kerry also have different way of measuring economic success -- or failure -- and who should get credit.

On his official Web site, www.johnkerry.com, Kerry says 1.6 million private-sector jobs have been lost during Bush's term. The typical American family's income has dropped by $1,500 and real business investment and exports have fallen for the first time in 70 years.

Bush, meanwhile, has pointed to economic strengths like unprecedented home ownership, a low inflation rate and a rising gross domestic product, according to his official campaign Web site, www.georgewbush.com. He blames the rut on a sputtering world economy, corporate scandal and the Sept. 11, 2001 terrorist attacks.

"The stock market crash, remember, happened before Bush took office," said Andy Banducci, Penn State College Republicans chairman. "We were already in a recession when Sept. 11 happened."

Banducci said the American economy has already improved, and attributes the comeback to Bush's tax cuts.

GRAPHIC: Andrew Lashin/Collegian
GRAPHIC: Andrew Lashin/Collegian
SOURCE: www.house.gov/budget

"We are an exceptional place to invest, compared to the rest of the world."

The blame-game is a tricky war to wage, Rayman said.

"Any self-respecting Democrat is going to say, 'Well, we had the glory years under Clinton. We cut the deficit down to nothing. We had almost no inflation, low unemployment, blah, blah, blah.' And of course any Republican would say that the only reason for that was because of the policies that were set up before Clinton came to office," Rayman said.

Neither side has much faith in the other's economic plan.

"To pay for his nearly $2 trillion plan, Kerry's going to have to raise taxes across the board, which means a middle class tax hike," Banducci said.

But Megan Green, Penn State College Democrats president, said that much of the extra money would come from scrapping existing programs Kerry thinks are particularly wasteful.

Kerry may cut the national missile defense system's $8.3 billion budget.

"In every administration there are wasteful programs like those and it's up to the next administration to eliminate them," Green said.

Bush has repeated that his economic package is working and cites the 96,000 new jobs that were created in September as evidence of a recovering economy.

If elected for a second term, Bush said he would keep the existing tax cuts for the wealthy. He added that the repeal of those cuts would raise taxes for nearly one million small-business owners.

Kerry's long voting Senate record on economic issues has been both attacked by Bush and paraded by Democrats.

Bush has accused Kerry, for example, of voting to raise taxes 98 times in 20 years.

In 1996, Kerry voted for a bill that raised the minimum wage from $4.25 to $5.15 per hour. If elected, Kerry pledges to raise the minimum wage to $7.00 per hour by 2007.

Bush said he would study all minimum wage initiatives in Congress, but has taken no stand on the issue.

Kerry and Bush have also haggled over outsourcing, a highly charged issue in states like Ohio, which been exceptionally hard hit.

Kerry has said outsourcing is sometimes unavoidable. However, he plans to remove the tax loopholes that encourage companies to outsource. He also wants to create a one-year, one-time tax holiday during which companies that have been keeping profits abroad can reinvest them here with minimal taxes.

Bush has been less aggressive against outsourcing.

"As unpopular as it might be to say in blue-collar areas," Banducci said, "you're not going to be able to stop outsourcing. And even if you could, you would not want to; it is economically efficient. That's basic economics."

Bush plans to extend access to higher education so unemployed Americans can find better, and more available jobs. He has committed $500 million to his Jobs for the 21st Century initiative and $23 billion for job training and employment assistance.

Both Bush and Kerry plan to cut the deficit. Neither side, however, seems to think the other capable of such a feat.

Banducci is not sure they should want to.

"I think it's more important to win the war on terror than balance the budget," he said.

Rayman said Penn State students are having a particularly hard time right now, but said this presidential decision extends far beyond the limits of the economy.

"I don't think that you pick a politician based only on what he's going to do for you in terms of jobs," he said.

The Associated Press contributed to this report.




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