Have We Got A Tax Cut For You!

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If the political effectiveness of Bush's plan isn't obvious, why does he argue so strenuously for it? In part because his conservative philosophy dictates that leftover federal money should go back to the taxpayers who earned it. And in part because his political strategy last fall ratcheted up the size of the plan. Bush is stuck with a decision he made to improve his profile during the primaries. At that time, his advisers believed their most serious challenge would come from Steve ("Flat Tax") Forbes. They were worried that Forbes would paint Bush as soft on taxes, like his father. To counter that, Bush proposed a tax cut massive enough to impress fiscal conservatives, but one that also included a pro-working family element. Result: a $1.6 trillion promise. The irony: Forbes never caught fire. Bush found himself saddled with a jumbo tax cut against an opponent--McCain--who argued for being fiscally prudent and paying down debt. Bush went on to win the nomination, of course, but he's still lugging around his tax-cut plan. And McCain's criticism stuck.

Gore had a similar reason for touting what is by any measure a serious tax cut: he needed to react to Bush. That political reality is apparent to voters, and may be one reason many people aren't tuning into this debate. "He's got to cave in and respond to all of Bush's tax-cut talk," says Howard Richards, 68, a retired real estate broker who turned up last week at a Gore tax event in Florida. Another reason is that Gore knows Democrats argue against tax cuts at their peril. Gore's side "spent 20 years getting hammered about the head by Republicans for being the party of tax-and-spend," says Aaron of the Brookings Institution. "They're not going to let that happen to them again."

Gore has not abandoned all his Democratic tendencies. He makes up for his smaller tax cut with gigantic spending proposals like a proposed increase in child health-care coverage and a prescription-drug benefit under Medicare. Ultimately, Gore would spend about as much of the surplus as Bush. The only difference would be where the money goes. Once either set of proposals was in place, it would be no easier to scale back Gore's prescription-drug entitlement than to reverse Bush's tax cut. Says Reischauer: "Why should today's policymakers dissipate tomorrow's possible surpluses?"

Both candidates have promised to keep talking tax cuts right into November. After that, reality will set in, no matter who wins. No President can wave a wand and change the tax code. As Representative Ray LaHood, the Illinois Republican, noted after introducing Bush at a rally in Peoria last week, "Congress will have some say about it." Whether or not Republicans retain their majority, it's unlikely that a sharply divided House and Senate would pass either plan in its current form. But don't tell Bush and Gore that; they're having too much fun jumping hip deep into piles of make-believe money.

Reported by James Carney, with Bush, Viveca Novak/Washington and Tim Padgett/Tamarac, Fla.