Share this story
Close X
Switch to Desktop Site

Mondale seeks to create major issue

Walter Mondale's latest gambit on taxes and the deficit puts him on a high-risk course in an effort to throw President Reagan onto the defensive. Mr. Mondale's deficit-cutting plan, spelled out Monday, attempts to make deficits the No. 1 issue this year with Mr. and Mrs. US Taxpayer. Federal red-ink spending will total about $170 billion this year. But the Mondale attack on the deficits, based on several major assumptions about the current political climate, could be dangerous.

First, the Democratic presidential candidate hopes that, in spite of a growing economy, taxpayers are more and more concerned about what he calls the ''crisis'' of the federal deficit and the government's growing trillion-dollar debt.

About these ads

Second, Mondale has taken the risk of spelling out in great detail exactly how he would tackle the deficit if elected. If he is to gain political yardage with this issue, his aides feel Mondale must be seen by voters as tougher and more credible on the deficit than Mr. Reagan.

Finally, Mondale hopes that Americans will do something they usually don't do - vote for higher taxes. Mondale aides say his plan would hike taxes for American families with adjusted incomes (after deductions) of more than $25,000. Those under $25,000 are promised no increases.

If this latest Mondale proposal succeeds, he and his running mate, Geraldine Ferraro, will have finally found an economic issue with which to go after the Republicans.

The growing economy, lower unemployment, and reduced inflation have neutralized some of the most sensitive issues for the Democratic ticket in 1984. Since the pocketbook issue is traditionally the most important, especially for Democrats, Mondale urgently needs to find some avenue to get economics into the 1984 political debate.

Mondale also could gain something else from his deficit-cutting package. He could begin to chip away at Reagan's tremendous lead in what is called the ''leadership'' issue.

A Gallup poll released this week illustrates Mondale's problem. While 64 percent of all voters polled said Reagan ''has strong leadership qualities,'' only 42 percent thought that about Mondale. By a 51-to-36 margin, voters said Reagan is more likely to say what he believes, even if it is unpopular. And by a margin of 46 to 34, Reagan is said to be more likely to ''put the country's interests ahead of politics.''

In response, Mondale aides point to the deficit-reduction proposal.

About these ads

The Democratic candidate, taking on perhaps the most sensitive issue of all, has shown that he will take the tough steps necessary to cut that deficit - and thereby bring down interest rates.

In a nationwide radio address over the weekend, Mondale tried to couch the issue in terms of leadership.

''Leadership matters,'' he said. ''Our next president, whoever he is, will face deficits of $200 billion and more as far as the eye can see.

''He can ignore them. But that would mean committing economic suicide in slow motion.

''Or he can step up to them. After the election, there's no doubt that Mr. Reagan will move to cut them. So will I. The question is how.''

Reagan has moved quickly to counter the Mondale move. In a brief campaign swing, the President told a crowd in Pennsylvania:

''Just to pay for the spending promises he (Mondale) made will require a tax increase of almost $2,000 for every household. Now somehow I think that working families will see more fairness in our plan.''

Mondale aides counter that the $2,000 figure is way off base. For a family of four with an income of under $25,000, there would be no increase. From $25,000 to $35,000, the rise would be $95 a year. From $35,000 to about $45,000, the rise would average $205 a year. At $100,000, the boost would be about $2,600 a year. The wealthiest 14 percent of all Americans would pay 75 percent of the higher taxes.

W. Bowman Cutter, a Mondale adviser on the budget, concedes that some middle-income people would get hit by a Mondale tax hike. But he argued that the increase would be easily offset by a 1.5 percent drop in the cost of an auto loan. And if a middle-income taxpayer bought a house, Mr. Cutter told the Monitor, the savings in interest would compensate for the higher taxes as much as fourfold.

The Mondale program, aides concede, has risks. They just hope voters will see it as they do - as ''an act of unusual leadership.''

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.