White House contenders' economic policies show sharp contrasts
One man's meat is another man's "sugar-coated poison," says President Carter, in describing Ronald Reagan's tax plan. Which is another way of saying that the two leading contenders for the presidency look very differently at the pocketbook problems affecting most Americans.
In addition, Mr. Carter's economic policies will face a bruising public challenge from Sen. Edward M. Kennedy (D) of Massachusetts at the Democratic Party convention in New York next week.
"What you have," says a White House official, speaking of Carter-Kennedy-Reagan economics, "is three well-defined and very different programs before the voters."
Mr. Carter, meanwhile, postponed until around Labor Day the unveiling of an "economic renewal" plan, which -- the President says -- will create "millions and millions" of American jobs.
Why the postponement? Because, according to administration sources, White House political and economic aides have not meshed their differing priorities into a program to which the President should commit himself.
Economic advisers, insisting that inflation is dangerously alive and breathing fire, want a program both prudent and noninflationary.
Political aides, anxious to bolster Mr. Carter's standing among working class and minority voters, urge a more flashy approach to those groups.
So the President speaks in generalities, while Messrs. Reagan and Kennedy have specific things to say.
Following is a summary of where the candidates stand on major economic issues:
Jimmy Carter: Fighting inflation holds top priority. Hence a tax cut should be postponed until sometime next year and, when it comes, should stress incentives to business to invest in more modern plants and equipment.
No White House consensus has emerged on how much, and in what way, to lower the steadily rising tax burden on individual Americans.
Government spending should be frugal, except for defense outlays. The Federal Reserve Board's tight-money policy is approved.
Energy prices will be brought to the world level, to encourage conservation, reduce oil imports, and foster development of synthetic fuels and other alternatives.
Ronald Reagan: Personal income taxes should be cut 30 percent across the board over three years, beginning with a 10 percent slice Jan. 1, 1981. Reagan, like Carter, favors tax incentives to business.
He would boost military spending above Carter's levels and cut billions of dollars from other government programs, with the aim of balancing the federal budget.
The US energy industry -- oil, natural gas, coal -- should be "unshackled" to find new domestic energy supplies. Price decontrol would be hastened.
Edward M. Kennedy: Taking a sharply different view from Carter and Reagan, Senator Kennedy would trim defense spending and boost social outlays, including job-creating programs.
He would freeze wages, prices, interest rates, profits, rents, and dividends for a limited period, to be followed by mandatory wage and price controls.
Business would be granted tax relief generally, but loopholes -- particularly those benefiting major oil companies -- would be closed. Controls on domestic oil prices would be reimposed and gasoline would be rationed.
At the New York convention Mr. Kennedy clearly hopes to portray himself as the friend of poor and disadvantaged Americans, while painting President Carter as outside the Democratic mainstream.
President Carter, for his part, lambastes Mr. Reagan's tax policies, claiming that a 10 percent across-the-board income tax cut would benefit the rich, foster inflation by spurring consumerism, and throw and budget deeply into the red by reducing tax revenues.
"The first-year cost of the program which Governor Reagan has proposed," says Charles L. Schultze, chief White House economic adviser, "is a loss of [tax] revenues of about $35 billion.
"By the fifth year, before allowing for an economic impact, the gross loss is about $280 billion.'
Reagan advisers sharply dispute this, claiming that extra spending by families and corporations -- engendered by the tax cuts -- would so stimulate the economy that fresh revenues would flow into the federal treasury.
An important part of Carter's "economic renewal" program is expected to deal with revitalization of inner cites, partly to offset the impact on voters of Reagan's "enterprise zone" concept.
In areas of urban blight, Reagan would lighten tax burdens to spur investment and attract new business. Property taxes might be lowered to hold workers and induce others to come.