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Talking It Over
August 9, 2000
Earlier this summer, the President made an offer to the Republican leadership on Capitol Hill: If they would pass an affordable, voluntary Medicare prescription drug benefit, he would sign marriage penalty relief into law. Unfortunately, not only did they fail to pass a prescription drug bill, the marriage penalty bill they sent was regressive and expensive, benefiting the wealthiest taxpayers, and leaving the President no choice but to veto.
If you watched any of last week's Republican convention in Philadelphia, you heard a great deal about cutting taxes. What you didn't hear, though, was this number -- $2 trillion -- or nearly the total cost of the Republican proposals. Nor did you hear anything about the effect that these cuts would have on our nation's hard-won prosperity, nor that it would be the wealthiest Americans who would enjoy the lion's share of the financial windfall. Finally, you didn't hear about the President's own plan for affordable, targeted tax cuts.
The President's plan puts working families and children first, offering middle-class families substantially more benefits than the wealthy. Among other provisions, it includes targeted and affordable marriage penalty relief and help with college expenses. The College Opportunity Tax Cut provides a choice between a tax deduction or a 28 percent tax credit on up to $10,000 in college tuition. The President would also extend the child care tax credit to parents who stay at home, and help millions of working families by defraying up to 50 percent of child care expenses.
In the long run, because it is less costly, the President's plan also preserves the resources necessary to fund the Medicare prescription drug benefit, lengthen the life of Social Security and Medicare, help pay for the baby boomers' retirement, and wipe out the national debt by 2012.
The Republican plan, on the other hand, saves the best for the wealthy. While the top 1 percent of taxpayers would reap a tax break amounting to an average $16,000 per family, the bottom 80 percent would find their taxes reduced by $167.
This approach is not only unfair, it threatens the economic prosperity we have worked so hard to achieve. In the last quarter, our economy -- which has produced 22 million new jobs and the lowest unemployment rate in over 30 years -- grew at a vigorous 5.2 percent clip, more evidence that a commitment to common-sense, kitchen-table values, such as not spending what we don't have, is sound economic policy.
One byproduct of our economic success has been lower interest rates. When the President took office in 1993, he inherited a debt that had quadrupled under Republican administrations going back to 1980, driving interest rates up to double digits in the process. Thanks to budget agreements struck in 1993 and 1997, we are now on track to wipe out that debt and keep interest rates low.
Since 1992, as a result of moving from a deficit to a surplus, interest rates have dropped 2 percent. For a typical, middle-class American family of four, that 2-percent drop has meant substantial savings -- including $2,000 on their home mortgage and $200 each on student loans and car loans.
Without the nation's commitment to fiscal discipline, including the President's promise to veto tax cuts that fly in the face of that commitment, we could find ourselves tumbling right back to the dark days of deficit spending and higher interest rates.
If the tax cuts passed by the House Ways and Means Committee this year were to become law, this same middle-class, working family would stand to realize $220. But if interest rates were to rise by as little as one-third of a point, their short-lived gain would be outweighed by a bump in their mortgage bill of $270.
The President's plan, on the other hand would provide a $371 average annual tax break, accompanied by lower -- not higher -- interest rates.
The Republican tax cut plan is not only too big, it is reckless and irresponsible. Not only has the GOP turned its back on the hard work of the past seven and a half years, party leaders have foreclosed any opportunity to stay the course by investing in such non-partisan issues as paying off our national debt, extending the life of Social Security and Medicare, adding the prescription drug benefit, and investing in education, the environment, science, technology or health.
In short, the Republican plan shortchanges our children's future. How we respond is a test of our values and our character as a nation. Do we invest in our children? Or do we opt for instant gratification?
It's time to send a message to the Republicans on Capitol Hill: Put partisan politics and shortsighted spending schemes aside. Trust the American people. They know what's right. They know it's time to make a down payment on our future.
To find out more about Hillary Rodham Clinton and read her past columns, visit the Creators Syndicate web page at www.creators.com.
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