What's The Difference?

The numbers sound gigantic, awesome, mind boggling. Match them up against the stunning dimensions of the U.S. economy, though, and the figures the Al Gore and George W. Bush campaigns brandish on the stump suddenly shrink to a kind of marginal gloss. That was one of the first and most often made observations by TIME's Board of Economists when asked to weigh the presidential candidates' competing programs in the national balance. David Wyss, the nonpartisan chief economist of Standard & Poor, prices Bush's and Gore's tax and spending plans at around $1.5 trillion over the next 10 years. That sounds like an awful lot of money, and it is, but in fact it would amount to only about 1% of the total of goods and services the economy is expected to produce over that period.

The upshot: anyone who expects to vote for Bush or Gore according to whose plan seems most likely to keep the U.S. boom bubbling should look for another basis on which to choose. TIME's board painted a rosy picture of economic prospects for the next 10 years--no matter which presidential hopeful wields the brush for the finishing touches. Says Wyss: "You've got to choose between these plans--and between these plans and nothing--on the basis of equity and social effects, not on their economic impact."

Even if the boom does roll on for a decade longer, there is a question of which approach, Bush's or Gore's, would leave the economy in the best shape to weather the shocks foreseeable a quarter-century or so ahead. In the view of the less partisan members of TIME's board, the answer is, neither. But the competing plans pose quite different answers to the question of how best to distribute the benefits--or more bluntly, to that fundamental political question, Who gets what?

There are large areas of agreement between the two sides--much wider than anyone would guess from hearing the candidates slam each other. Agreement begins with the most basic calculation: How much money will be available to fund tax cuts and new spending and to pay off federal debt? Both sides accept a Congressional Budget Office estimate that with no changes in policy, the government will rake in a staggering $4.6 trillion more than it pays out over the next 10 years.

Relatively apolitical members of TIME's board--Wyss and Abby Joseph Cohen, head of the investment-policy committee of Goldman Sachs--are not so sure about that. They cannot suppress a nagging memory: five years or so ago, most economists were forecasting huge federal deficits as far as the eye could see--with as much certainty as they are now predicting giant surpluses for the next decade. Could the current optimism be equally off base?

Democrat Robert Reischauer, president of the Urban Institute and former director of the CBO, points out some ways in which his old agency's forecasts seem more than shaky. The CBO assumes that "discretionary" spending--the amount that Congress is free to raise or lower each year--will increase only as much as inflation does. "Totally unrealistic," says Reischauer. Another assumption is that certain tax credits will expire on schedule, although Congress always extends them, and that the alternative minimum tax, paid by people who get large amounts of income from otherwise tax-sheltered sources, will continue unchanged. "There is no way on God's green earth" that will happen, says Reischauer; Congress will change the tax because it is beginning to hit middle-income people as well as tax-shelter millionaires.

On the other hand, Republican Lawrence Lindsey, a resident scholar at the American Enterprise Institute and former member of the Federal Reserve Board, lists some ways in which the CBO estimates are too conservative. Most important, the cbo estimates the U.S. economy will grow at an average rate of only 2.7% a year over the next 10 years, while TIME's Board of Economists believes potential growth may be as high as 4% annually. Every percentage-point increase in growth increases federal tax collections 1.4%, says Lindsey, so revenues could easily rise far more than the cbo figures. Reischauer agrees, and believes the opposing errors probably offset each other, leaving the $4.6 trillion as a reasonable base for planning.

Saving the Big One
The biggest part of that, $2.4 trillion, is expected to come from the Social Security system. Gore and Bush partisans fully agree that all that surplus should in effect be saved by using it entirely to pay off debt. That leaves $2.2 trillion "for other priorities," as Lindsey puts it, and the biggest difference between the two campaigns is whether to address those priorities "mostly on the tax-cut side," as Bush would, or "on the spending-increase side," a la Gore. Even these differences, however, are somewhat less than absolute. Gore also is proposing tax cuts, though smaller than Bush's and distributed differently. Bush, like Gore, wants to add a prescription-drug benefit to Medicare, though it may be smaller than Gore's.