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TSONGAS: It's not a very good economic approach. You would spend $30 billion on the middle-class tax cut, and you spend $25 billion on the tax credit for children, so you have taken $55 billion you could have used to gin up the engine, and you used it for consumption. That is a consumption-based strategy. I know the value of a middle-class tax cut in terms of the political appeal it has, but that's $55 billion that could have been used to stimulate investment and new jobs.
CLINTON: If I can just say this . . .
TSONGAS: Let me finish. You know, you said some things will produce more growth than others. You are exactly right. We both came to the same crossroads. You can either go down the consumption approach or the investment- based approach, and to the extent you allocate those $55 billion to consumption, you are not investing.
CLINTON: Well, to the extent that we have four more years where all the real net tax burdens go to the lower-middle-class or middle-class people, which is what you propose to do, I think it is bad economics. And it is bad human policy.
I did not come to this conclusion on the basis of a poll. We raised the Social Security tax seven times in the '80s, and we know who that hits, don't we? Middle- and lower-middle-class people and small-business people. The | Social Security fund is now $70 billion in surplus. That is why the deficit isn't worse than it is. So we made a policy decision as a nation that we were going to take middle- and lower-middle-class people and make them make this huge contribution, keeping our deficit from becoming bigger than it is.
The way I came to the across-the-board middle-class tax cut didn't have a relationship to the polls. I was trying to figure out how to stop the class warfare of the '80s and how to quit punishing the people who played by the rules and got the shaft. So I came back to the middle-class tax cut as a down payment on fairness. I never thought it was very good politics. If you look at the complexion of the Democratic electorate in the early-primary states and the fact that there was no organized support for any kind of across-the-board program, just like there never is, it's a lot better politics to come out for capital gains and enhanced IRAs where there are upscale voters.
I am not in this thing to pander. I have watched the rank-and-file people of this country whom I represent get murdered in the '80s. You talk about this middle-class tax cut as if it is, A, the centerpiece of my program; B, pandering; and C, going to bring down the economy. After what we just did in the '80s, I think it is wrong.
TSONGAS: The New York Times referred to the middle-class tax cut as fool's gold. The Democratic strategy is middle class, middle class, middle class. That is the mantra. And the middle-class tax cut is a way to say to the middle class, We care not only for the poor, but we care for you too. But it seems to me our responsibility is to get people jobs.