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CAMPAIGN-BUDGET Aug-12-2004 (1,090 words) Backgrounder. With logos posted March 10 and photos posted today. xxxn

Campaign '04: Bush, Kerry are far apart on taxes, budget, economy

By Jerry Filteau
Catholic News Service

WASHINGTON (CNS) -- With different political philosophies, Republican President George W. Bush and Democratic rival Sen. John F. Kerry are far apart on how they would structure taxes and the federal budget to help shape the U.S. economy for the next four years.

How well or poorly either candidate's plans and programs would mesh with principles for economic justice outlined by Catholic social teaching is another matter.

In today's complex, increasingly globalized economy, there is no simple way to translate norms of social justice and equity into U.S. public policy decisions. Too much depends on the practical outcome of the policies, on which there is wide disagreement.

Last September the Administrative Committee of the U.S. bishops issued a 21-page statement, "Faithful Citizenship: A Catholic Call to Political Responsibility."

A relatively small portion of that statement addressed tax, budgetary and economic policy issues directly, although what the bishops said on a wide range of other issues had budget-related policy implications.

In their most direct statement on the economy and government policy, the bishops said:

"Church teaching on economic justice insists that economic decisions and institutions be assessed on whether they protect or undermine the dignity of the human person. We support policies that create jobs for all who can work with decent working conditions and adequate pay that reflects a living wage. We also support efforts to overcome barriers to equal pay and employment for women and those facing unjust discrimination.

"We reaffirm the church's traditional support of the right of workers to choose to organize, join a union, bargain collectively, and exercise these rights without reprisal. We also affirm the church's teaching on the importance of economic freedom, initiative and the right to private property, through which we have the tools and resources to pursue the common good."

On the domestic front, Bush recently credited his administration's tax cuts with spurring economic recovery and said, "To sustain this economic growth, we need to keep taxes low. Higher taxes right now would undermine growth and destroy jobs. ... We need to make the tax relief permanent."

Noting that most of the Bush tax cuts benefited people in the highest income brackets, Kerry recently said, "I'm fighting to roll back George Bush's unaffordable tax cut for the wealthy and invest it in health care, education, job creation and to build America again."

A little more than 9 percent of the Bush tax reduction package went to the three-fifths of American households earning $53,000 or less. Almost 14 percent went to those in the next fifth, earning up to $84,000, and 77 percent went to the one-fifth of households with incomes above $84,000.

The administration argues that the tax cut was necessary to spur growth and restore the nation's economic health; the Kerry campaign says the cut contributed to record deficits that endanger the U.S. economy. According to White House projections, the deficit for the fiscal year ending Sept. 30 will be a record $445 billion, well above last year's $375 billion deficit but below earlier projections of more than half a trillion dollars.

The Bush campaign literature focuses on making the administration's tax cuts permanent. Kerry says he would roll back the tax cuts for the wealthy, increase the child care tax credit and middle-class tax cuts and use tax incentives to get businesses to invest in jobs at home, not abroad.

Bush and Kerry both claim their plans will cut the federal deficit in half -- Bush in five years, Kerry in four.

This summer, Republicans in Congress began floating the idea of a national sales tax, prompting Bush at an Aug. 10 campaign event to say that while he had no idea how large a national sales tax would have to be "it's the kind of interesting idea we ought to explore seriously."

Kerry said such a tax would have to be as large as 30 percent and would hurt small businesses and middle-class families the most.

Kerry proposes raising the U.S. minimum wage from the $5.15 per hour set in 1997 to $7 per hour. Under a "minimum wage increase" heading, the Bush campaign Web site stresses the number of new jobs created in the past year and the need for "policies that will keep the economy growing" -- language traditionally used by opponents of a higher minimum wage -- but adds that the administration "will continue to work with Congress to study the various minimum wage proposals."

Bush and Kerry disagree sharply on the meaning, impact and number of new jobs generated in the United States since last August. The Kerry campaign claims that most of the new jobs are in fields of work where wages are below the national average, while the Bush campaign argues that most of them are in higher-paying fields of work.

Kerry says a Democratic administration will create 10 million new jobs in the country. His "Jobs First Tax Cut Strategy" includes closing loopholes that provide tax breaks to companies that move jobs overseas; giving a tax credit to small companies for each new employee hired; eliminating capital gains taxes for those who invest in small businesses; and giving small employers a tax break of up to 50 percent on the cost of covering health insurance for workers.

On the U.S. role in the global economy and the development of heavily indebted and underdeveloped nations, "Faithful Citizenship" said, "As a wealthy and powerful nation, the United States has the capacity and responsibility to address (the) scandal of poverty and underdevelopment."

"The United States," the bishops added, "should take a leading role in helping to alleviate global poverty through a comprehensive development agenda, including substantially increased development aid for the poorest countries, more equitable trade policies and continuing efforts to relieve the crushing burdens of debt and disease."

The Bush administration has continued the process begun under President Bill Clinton to fund significant debt forgiveness in poor countries facing massive external debt.

Bush also launched a three-year $15 billion Millennium Challenge Account to improve living conditions in poor countries and launched a five-year $15 billion commitment of U.S. aid to fight disease abroad, especially the spread of HIV and AIDS in Africa and Asia.

The Kerry campaign calls for more reliance on inexpensive generic drugs to fight AIDS globally, a more collaborative multilateral approach than the largely bilateral aid approach of the Bush administration, and raising U.S. anti-AIDS funding to $30 billion by 2008.

Kerry also calls for "deeper and broader debt cancellation" for heavily indebted poor countries.


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