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Here's the beef; what the press hasn't asked; what the candidates haven't answered.

Here's the BEEF

"I'm someone who happens to believe that more trade is better than less trade," confides Candidate Dukakis out on the hustings.

"Building good jobs is going to be our top job," volunteers rival Candidate Gephardt.

"I have made my preference clear," Candidate Gore wants us to know. "My first choice for reducing the deficit is economic growth."

Not very helpful? Well, neither is Candidate Simon. "This country needs leadership unafraid to make the tough choices to balance our budget," he says. "The best path to deficit reduction is job creation."

Still wandering in the wilderness, looking for an exit from America's current world of trade imbalances, record deficits, market crashes, and moribund industry? Disgruntled with unfair taxes, inept schools, and greedy interest groups? Ready to get down to business? "I'm a tree-shaker," offers Candidate Jackson, "not a jam maker."

What we need is a candidate shaker. Left to themselves, the Democrats have shown little inclination to take on the issues that count and talk about them in ways that matter. All support "economic growth," but few are specific on how to get it. All support "competitiveness," but few are talking about how to make short-sighted managers and stubborn unions do anything about it.

This year, as in every election year, the press has bemoaned the lack of issues. "There are few cutting issues or themes or ideologies for the candidates," wrote Time in a typical lament, urging the candidates to "offer the voters themes and ideas rather than merely their personalities . . . the real trick is having something to say."

But it takes two to have a superficial relationship. The press must bear much of the responsibility for the lack of useful information coming our way. Too many reporters see the campaign as a phenomenon in itself, set apart from the issues of governance it will determine. We learn more than most of us would ever care to know about staff rivalry and power struggles, weekly polls and fundraising strategies, Iowa county politics and New Hampshire weather. When The Wall Street Journal devoted a 32-page special section to Politics '88, it reserved one page for issues coverage, which it sandwiched between stories about campaign advance work and speculation about who might emerge as key convention powerbrokers. Yet, the caucusing of Michigan Republicans--so arcane that neither the candidates, the columnists, nor the caucusers could explain what was at stake--spilled out in 50-inch take-outs in the nation's top papers. Gary Hart's return to the campaign is likely to exacerbate the press's taste for the superficial.

Calvin Trillin captured the shallowness of so much of the coverage in a recent interview with The Christian Science Monitor. "Probably 80 to 90 percent [of the coverage] is devoted to who is likely to win the election--something everybody's going to know the night of the election," he mused. "What if they were right? I mean it doesn't make any difference."

When reporters do focus on the issues, too often they let the candidate set the agenda. Reporters that feel ever-capable of writing "analysis" pieces to depict mood, momentum, and other vague elements of campaign "advantage," are willing to serve as mere scribes at issue sessions. "Dukakis: Defense Spending about Right," read the headline of a recent piece by The Washington Post's David Broder, one of the country's best political reporters. The piece went on to offer Dukakis's defense laundry list: halt the MX and Midgetman missiles, cut back the Strategic Defense Initiative, and keep the Stealth bomber. That's fine, as far as it goes. But like so many politicians, Dukakis--and the story-- ignored many of the forces that really jack up the Pentagon's budget, like the over $100 billion spent on military pay and retirement benefits, and the bedrock assumptions behind keeping 2.1 million active duty troops in uniform.

Ironically, this year's campaign coverage is already considered more scrutinizing than ever. Reporters are willing to hide in the bushes to plumb further the nuances of the "character" of the man whose finger may be on the button. No details of dress seem too small or relationships too private to escape our attention.

Sure, we want to know about a candidate's temperament, humor, judgment, and poise under stress. We want to know about his life's experiences. Jesse Jackson's childhood does shed light upon his prospective presidency, as does Albert Gore's service in Vietnam, or Paul Simon's fight against corruption in the state legislature. Not even the most zealous issue-monger would suggest that a candidate's suitability for the presidency can be gleaned from a stack of policy papers alone.

But the distinction usually drawn between issues and character is a false one. Where a candidate stands on the issues is one of the best character tests of all. Is he courageous enough to say what the facts demand? Smart enough to understand the implications? Does wisdom guide his words, or expediency? While too many reporters search bedrooms and war records for clues to that evanscent quality called character, the issues get pushed aside.

What follows are the profiles the other magazines and newspapers aren't giving you. Look hard. You won't find a word about Paul Simon's bow tie or Al Gore's wife. What you will find are six issues that test the Democratic candidates' suitability to govern: Tax the wealthy; Cut the sticker prices; Let the talented teach; Get serious about the deficit; Serve the community; and Unentitle the unneedy (and really help the poor). They cover a lot of American terrain-- from ghetto schools to military bases, from hospitals to factory floors. But they also bring to light the single most troubling and intractable dilemma we face: the politics of selfishness. More than that, they point the way out.

There are other positions that any Democratic nominee should embrace. These include (to name just a few) specific commitments to revitalize the Environmental Protection Agency, raise the minimum wage, deny military aid to the Nicaraguan contras, and reduce the Pentagon's interservice rivalries, as well as seek progress on perennial concerns like nuclear arms control. A good president would tackle these issues; a great one needs to go further.

That's why there is no grading on a curve here. Any one of the six democrats would give us policies better than those of Ronald Reagan. Judged against the likes of Jack Kemp, George Bush, Pat Robertson, and the rest of the GOP field, most of the Democrats would earn As and Bs.

But this test is confined to Democrats, and it expects more than mere adequacy. That is why most of the candidates do poorly. What's missing is leadership that promises much but also asks Americans to do their part.

Glance through the piece you'll see a consistent exception to the waffling and the fudging: Bruce Babbitt. On education, entitlements, the economy, and taxes, Babbitt has been on the mark, leveling with us about the hard choices immediately ahead. But he's no doom-and-gloom Democrat. If enacted, Babbitt's plans for broader labor-management cooperation, expanded government assistance for the needy, and stronger classrooms could give the country what it needs: programs that are affordable, compassionate-- and that work.

The political experts and the conventional press will point out the obvious and tell us that Babbitt isn't selling. But if you believe that it will take more than a Mondale with charisma for the Democrats to improve their sorry record--16 of the last 20 years out of the White House--read on. Let others cover the horse race. Here's the beef.

Tax the wealthy

Just as lobbyists for the Tobacco Institute still insist that cigarettes don't cause cancer, Ronald Reagan, Jack Kemp, and the editors of The Wall Street Journal still insist that tax cuts for the wealthy will heal the economy, produce more revenue, and reduce deficits. Most of us long ago recognized the truth. Smoking kills--and supply-side economics is a crock.

Since 1979, the national debt has tripled to more than $2 trillion, while business investment and savings have dropped. Growth has averaged just 2.1 percent, anemic by historical standards, and has been fueled largely by VISA cards and deficits--classic "demand-side" conomics.

In chasing the mirage of easy prosperity through lower taxes, the nation lost sight of the single most important principle of taxation: the costs of government should be apportioned according to the ability to pay. Between 1977 and 1984, the top 10 percent of the nation's taxpayers increased their share of the nation's income by about 12 percent. But their share of the nation's tax burden dropped by about 11 percent. A major reason for this is that the marginal rates in the top bracket were cut from 70 percent in 1980 to 50 percent under Reagan's 1981 tax cut act, and then to 28 percent under the Tax Reform Act of 1986.

The Democrats must share the blame. Yes, the 1986 act was a remarkably welcome development; tax rates were lowered for almost everyone, primarily by closing loopholes for the rich and raising the corporate income tax. But the act still treated the affluent too tenderly. Its main architect, Senator Bill Bradley, fought efforts to add a third, higher tax bracket for the well-to-do. By retaining the top bracket of 38.5 percent that's currently in the tax code and due to expire, a Democratic president could increase progressivity and raise about $22 billion. While it's not the answer to our deficit woes, a third bracket would reaffirm the important principle of demanding a fair share of the rich. That bracket would affect fewer than 2 percent of all taxpayers; a family of four would have to earn $115, 000 to qualify. Even Senator Jay Rocketfeller looks kindly on this idea, however unpopular it might make him at the next family reunion.

There are other ways to boost the progressivity of the code. Half the Social Security benefits of the wealthy are tax free, as are all Medicare benefits. (See "Unentitle the Unneedy.") The Lifestyles of the Rich and Famous are now subsidized with unlimited deductibility for the mortgage interest they pay on their mansions and vacation homes. While one in six Americans has no health insurance, the tax code allows the wealthy to deduct completely the cost of even the most generous health insurance policies, like those that pay for plastic surgery.

It's true that Democrats have sometimes acted as if their only job was to divide the wealth, assuming its creation would take care of itself. Supply-side economics was, in part, an understandable reaction to that mentality. But the pendulum has swung too far. What better time for the Democrats to reembrace the principle of progressive taxation than when the government so desperately needs the money?

Simon: Simon was one of just three senators who cast a vote against tax reform and he portrays his opposition as a profile in courage. Simon said he opposed the bill largely because it reduced the marginal tax rate for the rich to 28 percent.

While Simon was right to fight for a higher bracket, he was wrong to oppose the final bill. On balance, it was a vast improvement over the old code, especially in its treatment of the poor, six million of whom were completely removed from the tax rolls by increasing the personal exemption.

Simon's posturing is doubly hypocritical since he opposes current efforts to retain the higher bracket, making homey references to living by the deal that's been struck. It's an odd argument coming from someone who didn't support it in the first place. This duplicity doesn't wash, especially coming from a candidate who has proposed a balanced budget amendment, not offered to cut a single major domestic program, and proposed a number of new government spending programs, including an $8 billion jobs program. (See "Get serious about the deficit.")

Grade: F

Jackson: Alone among the field, Jackson unabashedly favors the higher tax bracket. He'd also caulk other tax loopholes by limiting deductions for business meals and entertainment and raising federal taxes on estates. (The last decade has seen a drastic reduction in federal inheritance taxes.) Jackson often cites the 1981 act as a major cause of our current economic plight, and he's exactly right. The only clunker in Jackson's tax program is the occasional noise he's made about an oil import fee (see Gephardt below). That's regrettable, but his call for a tax-the-wealthy bracket earns him our highest rating.

Grade: A

Gore: When an amendment was offered to the 1986 tax reform bill to make the 38.5 percent bracket a permanent part of the new code, Gore voted "aye." That's to his credit. Disappointingly, like Simon, he now opposes efforts to make the bracket permanent, arguing what's done is done. In a recent speech, Gore said that if taxes needed to be raised, he'd increase them on inherited stock ($5 billion), impose a "luxury tax" on items costing more than $30,000 ($1 billion), and prevent corporate taxes from dropping further ($10 billion). Not bad, but relatively tame stuff.

Grade: C

Gephardt: Gephardt joined Bill Bradley in sponsoring the Bradley-Gephardt tax reform act of 1986, and he deserves some credit for championing the cause back in the days when it seemed doomed. But Gephardt, who also supported Reagan's 1981 tax cuts, opposed efforts to add a higher tax bracket for the rich. He still does, though he supports a $12 billion loophole-closing bill now before Congress.

Gephardt's major tax proposal is a bad idea: a $5 per barrel "oil import fee." This would hurt most those with the least income, since the poor pay higher portions of their income on necessities like gasoline and heating oil. Such a tax would most likely cause domestic oil producers to raise their own prices to just below the new foreign price, boosting oil company profits but hurting the poor even more.

This "get tough" proposal also makes Gephardt look like a hypocrite. He's made a point of attacking other countries for erecting trade barriers to foreign imports--which is exactly what an oil import fee looks like if you happen to be a Mexican or Nigerian oil worker.

Grade: C

Dukakis: Dukakis doesn't support a 38.5 percent bracket or any other major change in the code. Instead he'd hire more IRS auditors to chase uncollected revenues. But his estimated haul of $110 billion is vastly inflated. (See "Get serious about the deficit.") It's a dishonest approach.

It's also one that would put expediency ahead of fairness. A major element of Dukakis's collection plan is a one-time "tax amnesty" that would allow tax cheats to pay up and avoid any penalty. But why not just boost enforcement and continue to punish the cheaters? Most of those seeking amnesty would not be middle-class suburbanites who forgot to report their garage sale receipts but affluent scofflaws who cynically sought bogus tax shelters.

Grade: F

Babbitt: While governor of Arizona, Babbitt was an early supporter of tax reform. When most of his fellow governors were carping that Reagan's "Treasury I" proposal of December 1984 eliminated the deductibility of state and local taxes, Babbitt was cheering, seeing the plan's virtue as a whole. To his further credit, he called for an additional tax bracket for the wealthy.

Babbitt is no longer advocating the third bracket he once supported. But he has made some amends by proposing to limit deductions of mortgage interest to one home and enact a "mansion cap." He's also called for limiting the deductibility of certain employee benefits, such as "Cadillac" health insurance plans, and redirecting the savings to health care for needy senior citizens, children, and indigents.

Babbitt's most ambitious tax proposal is a phased-in, 5 percent "consumption tax," to reduce the deficit. (See "Get serious about the deficit.") It's not as bad as it sounds. The tax would exempt basic necessities such as food, shelter, utilities, and medicine. It wouldn't be as progressive as a higher bracket, but it wouldn't be regressive either. And by making items more costly, it would curb appetites and encourage savings, which supply-side economics was supposed to do.

Grade: B

Let the talented teach

For too long liberals have treated the public schools as conservatives have treated the Pentagon: there was no problem that couldn't be solved by spending more money. But weapons that look fine on paper only to fail on the battlefield have their counterpart in schools that are producing millions of semi-literate students.

With half of the country's teachers expected to leave or retire in the next seven years, Democrats have an opportunity to stress a reform that will really count: better teaching. One of the unhappiest facts about public education is that most would-be education majors come from the bottom ranks of the college-bound, with average combined SAT scores of only 850. Some will make fine teachers, but many won't.

To promote better teaching, we need to draw more talented people into our classrooms and reward outstanding performance once they get there. Better pay alone won't do it. The nation's many outstanding teachers are badly underpaid, especially in comparison to those in other, less worthy pursuits. But if every teacher's salary were doubled overnight, the bad teachers would get just as much as the good ones.

The National Education Association prefers it that way. Its official position is that basing pay on performance "undermines morale" by suggesting that "some teachers may be more equal than others." But some teachers are much better than others. And they're often the first to leave.

"Merit pay" plans that would simply give the best teachers more money aren't making any political headway. "Career ladders" that give the best teachers both additional pay and additional responsibility offer a more promising approach. Rochester, New York, for example, recently established a four-step ladder that culminates in "lead teachers" who can earn up to $70,000 a year. Significantly, that contract was negotiated by the NEA's rival union, the American Federation of Teachers.

The Democrats should also confront the mindless credentialism that discourages many talented people from teaching. Almost every state requires prospective teachers to suffer a full regimen of often pointless education courses. U.S. News and World Report recently described a prosecutor in California who decided he could better help juvenile delinquents by becoming a teacher--only to discover he couldn't even get an interview without having taken the education courses.

The NEA and education school deans argue that "alternate certification" will allow incompetents into the classroom (as if many aren't there already, fully credentialed). This is a classic case of confusing real standards and phony ones, as shown by the thousands of talented and uncredentialed teachers in private and parochial schools, not to mention colleges. Good teaching requires a combination of knowledge, enthusiasm, and a gift for communicating with students. If a teacher can demonstrate those skills through a performance test and an apprenticeship (as in New Jersey), who cares about education courses like "Administering Leisure Delivery Systems"?

While states and localities govern pay and certification, the next president should use his office as a bully pulpit to advocate such reforms. In addition, he should use more of the $15 billion federal education budget to reward performance. Unfortunately, a recent Democrats' debate in North Carolina was long on cliches like "investing in the future" and short on real ideas. None of the candidates acknowledged even the basic differences between the NEA and the AFT and several fell over themselves with promises to fire Education Secretary William Bennett, a silly gesture since a cabinet sweep is taken for granted.

Simon: In 1982, a year before the presidential commission report A Nation at Risk put education reform on the political radar screen, then-Rep. Paul Simon was holding hearings on the low quality of prospective teachers. A year later, he chaired a special House task force that urged local school districts to experiment with merit pay and career ladders.

During the Carolina debate, Simon declared that "really outstanding teachers have to be given more money." He also urged higher base pay, higher standards, and more teacher autonomy. It's a fair trade, as long as the package stays intact.

Unfortunately, Simon isn't advocating alternative certification. And while his campaign materials boast that "Simon has done more for education than any other candidate," the proof he offers shows a disquieting logic: "His lifetime NEA rating is 88 percent, higher than any oter contender."

Grade: C

Jackson: During the 1984 campaign, Jackson admirably criticized bad schools as tools of class oppression that doom students to poverty. His call for higher standards and expectations came just as the educational reform movement was gathering steam.

That's why it's so disappointing that Jackson's 1988 campaign seems conspicuously devoid of such talk. More and more he sounds like a conventional, and outdated, liberal. In one major speech on education, Jackson did little more than criticize Reagan for cutting the education budget. He has pledged to increase the department's funding from $15 billion to $25 billion (by cutting defense--no surprise), but he has said little about how to spend it. Nor is Jackson challenging the education establishment on alternative certification.

When the question of performance pay arose in North Carolina, Jackson was the only candidate to flatly oppose it, arguing it would be too "political." Instead, he favors "combat pay" for those teaching in certain inner-city schools. Jackson's partly right: we should reward good inner-city teachers. But his pay hikes would go to everyone, including teachers guilty of educational malpractice. On the whole Jackson has regressed. He once knew better.

Grade: D

Gore: On issues like performance pay, Gore says the federal government should be "neutral"--and Gore has been too. During the Carolina debate, Gore stuck to safe and vague ground, confining his agenda to uncontroversial (though pricey) proposals like a longer school year, another "spend more" approach. He had nothing to say about alternative certification. Gore also promised to replace Bennett with a "working teacher" as secretary of education. It's an interesting thought, but one prompted more for political effect than by serious thought about how to improve education. Gore singled out better schools for more federal spending; that's all the more reason to be specific on how to translate dollars into results.

Grade: D

Gephardt: Education sends Gephardt's propensity for vapid rhetoric into overdrive. He pledges to "end illiteracy by 2000" and "have the best-educated people in the world by 2000." But when the question arose in North Carolina about rewarding teacher performance, Gephardt weasled out with a call for "more research." As for alternate certification, all a Gephardt education aide will say is "it's worth a look."

To his credit, Gephardt wants to redirect an unspecified portion of federal aid to reward schools that set goals and demonstrate real educational progress. He hasn't given any details, however.

Grade: D

Dukakis: Most of Dukakis's prescriptions come down to spending more money, including $250 million to improve teaching. At the North Carolina debate, Dukakis offered this admittedly worthy proposal in response to a question about what he'd do if he couldn't spend more money. He kept his silence when the question of "pay for performance" came up. And back home in Massachusetts, he's kept his distance from proposals to create "career ladders," which the NEA affiliate opposes.

He's a little better on alternate certification; a new state program opens the door a crack to the noncredentialed. But would-be teachers still have to jump through so many hoops (for example, a review board that includes teachers and education school representatives) that only a few people are likely to try.

Dukakis does support one innovative proposal to offer parental choice between one public school and another. This "public sector voucher" plan is designed to promote competition and greater accountability.

Grade: C

Babbitt: Babbitt is the only Democratic candidate who actually has pushed through a substantial package of educational reforms. What's more, he did it against considerable odds, facing a stingy Republican legislature and a state NEA affiliate that initially opposed much of his plan.

In North Carolina, when Gephardt lamely called for "more research" on pay for performance, Babbitt challenged him directly. "What we need," he said, "is the guts and the creativity to say we're going to pay the best teachers more, and teachers will accept it if we involve them in the process." Babbitt did just that in Arizona, working with teacher leaders until they hammered out a package that included both a career ladder and a tax increase to raise teacher salaries overall. Another portion of the package allowed noneducation majors into the classroom under the supervision of master teachers.

Grade: A

Cut the sticker prices

In 1980, the United States had a $17 billion trade surplus. Today, we're running a trade deficit of approximately $175 billion. This comes despite some good luck, like the collapse of OPEC (which spared us having to send billions of dollars to a few sheiks) and, more recently, the cheaper dollar (which has made Hondas and other imports more expensive while making Chevys and other U.S. exports easier to sell). For the tide to turn, the next president needs to show savvy both in tackling trade barriers abroad and in getting American industry to increase productivity so its products become more competitive in world markets.

There are ridiculous trade barriers to be knocked down. Japan, for instance, flatly prohibits the importation of rice, even though American rice is far cheaper. This is protectionism, pure and simple. But we've got our own examples. U.S. sugar beet farmers enjoy subsidies and Mr. T-sized barriers against imported sugar while American consumers get gouged. It's both hypocritical and self-defeating to pressure foreign competitors to play "fair," if management and labor here at home won't work together to produce better, less expensive products.

What kind of reform do we need? Thirty years ago, Walter Reuther, head of the United Auto Workers, offered to moderate wage demands if automakers held the line on prices. This would be a "win-win" strategy for both sides, Reuther reasoned, since it would mean fewer imports, more domestic car sales, and therefore more autoworkers. The automakers ignored Reuther's advice in the 1950s. Management is still ignoring it--and now labor is, too.

Since foreign auto imports account for one-third of the current U.S. trade deficit, the auto industry's example is sadly instructive. In 1981, auto executives and UAW officials convinced Reagan and the Democrats to impose "temporary" quotas on auto imports so Detroit could regain its competitive edge. This added about $1,500 to the sticker price Americans paid for cars, foreign and domestic.

The "temporary" quotas are still in effect seven years later. True, Detroit is turning out fewer lemons, and recent contracts have eliminated some unproductive work rules. But car prices have risen much faster than inflation; the average car buyer now pays nearly 80 percent more for a new car than he did in 1980. Fancier cars account for some of that, but mostly, it's simple price-gouging.

This is especially galling given that Lee Iacocca, Chrysler's chairman, likes to lecture Americans about getting tough and making sacrifices to reduce the deficit. Iacocca took home $1.8 million in pay last year and cashed in $20 million in stock options that would have been relatively worthless without the import quotas and the Chrysler bailout.

Perhaps worst of all, U.S. market share for domestic automakers has actually dropped. Yet Detroit is at it again. Ford and Chrysler are both proposing even tougher import limits, and sadly enough, the UAW is going along.

To be sure, a lot of companies and their unions have begun to confront reality, trimming executive salaries and jettisoning unwieldy union work rules that undercut productivity. But much more needs to be done.

Democrats should be unsparing in criticizing management excesses, like handing out golden parachutes even as executives let their companies plunge into a nosedive. But the real challenge for the next Democratic president is to convince the party's traditional allies in labor to take the lead. Imagine the goodwill (not to mention astonishment) that the UAW would foster in American consumers if tomorrow it announced a new plan: lower pay hikes, increased worker ownership, and a 10 percent cut in sticker prices to meet the challenge of foreign competitors.

Simon: Simon's protectionist instincts run deep. In 1984, he supported domestic content legislation requiring a large part of every automobile to be manufactured in the United States. Sayonara, Toyota! Since then, Simon has also voted for heftier barriers on imported steel, textiles, and farm goods, and he brags at AFL-CIO conventions of sponsoring "the Senate's toughest trade bill."

Simon's credibility with labor (he boasts of having the pack's highest AFL-CIO rating) makes him a logical candidate to refurbish the Reuther legacy of shared sacrifice for lower prices. This is one history lesson in which the scholarly Simon has little interest. He told the AFL-CIO, "We must be careful that the rhetoric of competitiveness doesn't become a code word for wage freezes, concessionary contracts, and other antiworker policies." But a wage freeze is not "antiworker" if it can save a factory. Simon ought to know better; he just needs to look at the empty factories dotting the Midwest landscape that once provided livelihoods for hundreds of thousands of workers at U.S. Steel, Caterpillar, American Motors, and other companies.

Grade: D

Jackson: Jesse Jackson's trade enemy isn't Japanese competition or low American productivity --it's an easier target, the multinational corporation. Jackson charges American firms like General Electric with relocating abroad to exploit low-paid foreign workers whose cheap goods flood the market and displace American laborers. And sometimes they do. But international trade is more complicated than that. What if GE produces parts in Taiwan so that its assembly plant in the United States can cut costs and stay open rather than succumb to competition from Japanese or Korean firms?

Jackson's approach to trade is not only hyperbolic, it's confused. Last summer The Wall Street Journal reported that he favored the Gephardt amendment; now he says he's opposed to it. Like Gephardt, he says he wants legislation punishing "unfair labor practices" by restricting the importation of goods produced by workers he considers exploited. But he also wants to help the Third World countries generate the hard currency they need to repay their debts. Aren't the two goals at odds? "Those are the kind of questions that would have to be worked out in negotiations," says Frank Watkins, Jackson's political director. Good luck.

Jackson's impulses are worthy but unworkable. How is Congress--or anybody--going to decide whether a $2.50-a-day wage for Filipino workers, or mandatory Saturday overtime in Taiwan, is unfair? The U.S. can't even stop its allies from throwing political dissidents in jail, much less pressure them to double wages. By providing for easy restrictions on imported goods, the proposal would allow a protectionist Congress to erect trade barriers as bad as those of the Smoot-Hawley Act that helped bring on the Depression.

To listen to Jackson, you would think none of our competitiveness problems are our own fault. This is ironic. When he works for Operation PUSH, Jackson emphasizes self-help. ("No one can help you, but you!") As a presidential candidate he encourages feelings of helplessness in farmers and blue-collar workers. At times as eloquent as William Jennings Bryan, Jackson offers a similar message: it's someone else's fault.

Grade: F

Gore: Gore at least has the rhetoric right: "We must be as quick to make Japan and newly industrialized countries open their markets as we are to denounce protectionism of our own . . .. Ultimately, we must recognize that our trading troubles started here, and that in the end they must be solved here."

But in practice, this could mean anything from laissez-faire to outlawing Peugeots. Gore harshly criticizes protectionist legislation, but says he would support import barriers in the case of "overwhelming unfairness" or a threat to "destroy a U.S. industry." Yet just about every industry that seeks protection complains of foreign perfidy and hints darkly of imminent demise. As a senator, Gore has applied that criterion broadly, voting to protect the textile industry (which has relatively low-paid workers by union standards) and the steel industry, which got into its predicament largely because of labor and management greed.

On labor-management relations, Gore also talks a good game. For example, he praises GM's new Saturn plant in Tennessee for its innovative labor contract that gives workers long-term job security in return for their agreeing to more flexible work rules and pay that's tied to productivity. But would he tell the auto industry that it could no longer rely on import quotas under a Gore presidency? So far, he hasn't said.

Grade: C

Gephardt: People love to hate the Gephardt amendment and they should. But let's be fair. Gephardt is being savaged in part because he's committed his thoughts to specific legislative language, while most of the candidates are talking so vaguely they can play up to both sides. It's also important to recognize that the amendment is more of a negotiating tool than a wrecking ball. It says that if a trade practice is "unfair," the president must negotiate. If that fails, he could impose a tariff--and Congress would be free to lift it. Gephardt, like Jackson, also wants legislation forcing other countries to adopt "a standard of internationally recognized worker rights."

These "Say Uncle" bills would be more palatable if they were accompanied by some honest talk about what needs to be done at home. Even Gephardt has conceded that only 15 percent of our trade woes stem from unfair foreign competition. But when asked whether his candidate has criticized a single American industry for its own brand of protectionism, campaign spokesman Mark Johnson demurred, saying Gephardt "doesn't go down to the micro level with specific industries." Instead, Gephardt peddles a painless path to prosperity, advocating bromides like more federal money for education, development, and worker retraining. This is policy popcorn--tasty but not anywhere as nourishing as telling the auto industry to cut sticker prices or kiss their quotas goodbye.

Voters could take little comfort from the recent Gephardt news conference called to advertise the support of the auto industry's labor and management officials, who consider him on the bandwagon for stricter import quotas. Smiling at the cameras as he handed Gephardt a $1,000 check was none other than Lee Iacocca.

Grade: D

Dukakis: Dukakis is dubbed the strongest "free trader" in the field, though it's hard to tell whether this label is attributable to shots at Gephardt or aphorisms like "I'm someone who believes more trade is better than less trade." For the most beleaguered industries, Dukakis does favor limited protections for limited periods. It's to his credit that Dukakis likes to tell the story of the Harley-Davidson company, which used temporary protection from imported motorcycles to reinvest in new equipment and substantially improve the quality of its products. The company then urged Washington to lift the barriers. No more open-ended import quotas, he promises, though he won't pledge to let such quotas expire as the one now in effect for steel is scheduled to in 1989.

On labor-management arrangements, Dukakis deserves credit as Massachusetts governor for encouraging business and labor to work together to prevent plant closures. But Dukakis has not been calling for the price cuts in the auto industry that might have prevented the recent shutdown of a GM plant in Framingham that employed more than 3,000 workers.

Grade: C

Babbitt: Babbitt would try to secure an international agreement requiring each industrialized country to maintain an overall balance of trade. We could run a deficit to Taiwan or a surplus with Sweden, so long as our overall accounts balanced out. Countries whose accounts didn't balance within 10 percent would face a tariff of up to 33 percent--which would be much tougher on export-obsessed Japan than anything Gephardt has proposed. Because they need big surpluses to pay off Citibank, Third World countries wouldn't have to balance their accounts.

If it worked, the plan would open markets around the world. The problem is that it might flounder. Does Indonesia have to balance its accounts? Is Morocco exempted? Who decides? Canada's huge trade surplus with the United States would pose a particular challenge, since many "Canadian exporters" are actually subsidiaries of U.S. corporations.

While Babbitt's "multilateral" trade policy is chancy, his call for cooperation in the workplace holds great promise. He calls on labor and management to improve their market share by forgoing pay raises and accepting more flexible work rules. He "vigorously opposes" any tightening of existing auto import quotas and would work to get rid of them. Babbitt is less shy than his rivals in singling out American labor for specific criticism. He recently criticized unions for work rules that punish productive workers who make others look bad. He also has the most specific ideas for allowing labor to take a leadership role. He has made "workplace democracy" a staple of his campaign, proposing, for example, to overhaul the 40-year-old Wagner act, which court decisions have spun into a productivity nightmare; as interpreted, the act encourages unions to push grievances to the hilt and lets management say "no dice" to workers who want to bargain for an ownership stake in their company. Most important, Babbitt calls for having two-thirds of all workers participate in some kind of employee ownership by 1996. (He'd do it by allowing tax breaks for those who invest in their own companies.) His reasoning is exactly right: if giving workers a real stake in the success--and failure--of their factories doesn't help make American industries more competitive, nothing will.

Grade: B

Unentitle the unneedy (and really help the poor)

Last year, the government distributed $525 billion in benefit payments. But less than $100 billion was allocated on the basis of need. More than $400 billion went to "entitlement" programs, the largest being Social Security, Medicare, military retirement, and civil service retirement.

The role of Social Security and Medicare in reducing poverty among the elderly is a great American success story. Forty years ago, one of every three senior citizens lived in poverty; today, that figure has shrunk to one in 20, counting the value of all government benefits. But this very success now raises fundamental questions of fairness. Under Social Security and Medicare, the retired board chairman is entitled to as much as, if not more than, the impoverished widow. This is a perversion of principle: help should go to those who need it.

Retirees often argue that they've paid for these benefits. But today's Social Security recipients get an average of three to four times what they contributed, after interest. Similar largesse exists for civil service retirees, and Medicare benefits are even more generous. For the military, the government pays 100 percent of the pension, which the average retiree begins collecting at age 41 and contributes to Social Security benefits that will become available when the retiree turns 62. The icing on this cake is that Congress usually votes full cost of living adjustments (COLAs) for all these pensioners.

This isn't just unfair, it's bleeding us dry. Though payroll taxes continue to rise, the Social Security system still faces certain bankruptcy in the next century when today's Baby Boomers retire. Medicare will likely be bankrupt before this century's end.

The best answer is "means testing," limiting benefits to those who need them. Under the purest means test, the affluent Sun City resident would collect nothing. The next best thing would be to include everyone, but apportion benefits and contributions in a way that reflects need and ability to pay. For example, all Social Security benefits should be fully taxable. (Current law taxes half the benefits of single people making more than $25,000, and married people earning more than $32,000.)

This wouldn't hurt the poor (with a progressive income tax), since those who most need the benefits will pay little or no tax on them. Medicare should be similarly means tested by taxing the value of the government's subsidy. COLAs for civil service and military retirees also should be tied to some standard of need.

As we cut payments to those who don't need them, we should redirect the money to those who do. Among the most needy are children, who are now six times more likely to live in poverty than the elderly. The simplest way for the government to help the poor is through a negative income tax. This familiar proposal from the early 1970s would provide direct payments to those who fall below a given income. It would allow the government to combine into a single program more than 50 means-tested programs, including Aid to Families with Dependent Children (AFDC), Medicaid, food stamps, housing subsidies, school lunches, and certain veterans benefits.

This approach would also facilitate another needed reform: making government assistance based on actual need, and not the accidents of geography. Alabama, for example, bars a mother with two children who earns only $1,764 a year from collecting AFDC and Medicaid. California, one of the most generous states, lets the same woman earn up to $9,049 and still qualify for AFDC. Even then, the California family is below the poverty level.

But welfare reform shouldn't be a one-way street. A universal program against need should also have a work requirement for able-bodied recipients with children above a certain age. If AFDC recipients can't find jobs in the private sector, and many can't, the government should provide them. This is exactly what FDR did by creating the WPA to replace welfare programs that simply wrote checks.

There's one service all Americans should be entitled to, rich and poor, and that's health care. The ideal solution isn't national health insurance, but something even more radical: a national health service whose doctors work directly for the government and provide care for free. Short of this revolutionary change there's room for improvement, like the creation of a "Medicare Part-C" to provide coverage for long-term care. The prospect of a bankruptcy-inducing stay in a nursing home terrifies the elderly. Their concern provides a political opportunity for fundamental reforms in government assistance programs that would benefit all generations. The elderly could be offered full protection against the catastrophic expenses of nursing home care, but in exchange they should agree to pay increased premiums and taxes on benefits, based on income.

Simon: Interviewed for this story, a Simon aide mused, "Just as it took Nixon to go to China, it might take a liberal Democrat to change Social Security." Unfortunately, Simon shows no interest in playing the role.

He strongly opposes all means tests, even the full taxation of benefits for the wealthy. He has a good idea in extending Medicare to cover long-term care at home, at a cost of about $7 billion a year. Simon plans to pay for it by eliminating the $45,000 cap on Medicare payroll taxes. But poor workers would still pay unfair payroll taxes--and with no means test, greater benefits would be given free to millionaire retirees. Simon's aversion to means testing becomes even more unsettling with his promise to unveil an ambitious plan to provide full nursing home coverage at a cost of up to $100 billion a year. Workers beware: this would probably mean drastically higher payroll taxes for everyone.

On welfare, Simon is in general agreement with the consensus Democratic position, as shown in his co-sponsorship of a bill by Senator Daniel Patrick Moynihan. The bill is a policy pussycat. Current law already requires welfare recipients to look for work if their children are six or older; the main thrust of the Moynihan bill is to extend the requirement to those with younger children. It also provides very modest amounts of money for more training and day care and boosts efforts to collect delinquent child support payments. Fine ideas, but hardly revolutionary. Recipients will get off the welfare rolls only if they can find a private employer to give them a job.

Simon has gone his liberal compatriots one step further by proposing the revival of a WPA-like federal jobs program. It's a very good idea. But Simon pulls his punch by not requiring welfare recipients to work. He'd leave it up to the states to decide.

Simon supports a bill by Senator Edward Kennedy requiring most employers to provide their workers with health insurance. Critics charge the measure would hurt small businesses, which provide the bulk of employment. But if all businesses shared the requirement, none would be hurt more than their competitors. Unfortunately, Simon has not outlined a plan to provide health care for those without jobs.

Grade: D

Jackson: "To reduce the universality for anyone is to weaken political support for everyone," said Jackson in a recent speech that attacked means testing so vigorously that he suggested those who proposed it weren't even Democrats.

There are several ironies here. First, Jackson's reasoning suggests that to help the needy, the rest of us must be bribed with undeserved entitlements. But if Reagan's cuts in aid to the needy offend most Americans, as Jackson suggests, why do we need the bribes? Second, money saved through means testing could be redirected to the needy women, children, and elderly he claims to represent.

Jackson deserves some credit for talking openly about the role of values and personal responsibility in perpetuating welfare dependency. "It doesn't take a man to make a baby," he tells teenagers, "but it does take a man to raise one." While Jackson's self-help invocations suggest he recognizes the need to strengthen the work ethic, he opposes efforts to do so by requiring welfare recipients to work. (That's "punitive," a spokesman said.) He deflects questions on welfare reform by talking of the need for full employment, which is only part of the story.

On health care, Jackson has advocated a "Universal and Comprehensive National Health Care System." But, as an aide acknowledges, "he hasn't gotten too specific."

Grade: D

Gore: "There is a myth among many who receive Medicare that their benefits are merely a payback of the money taken out of their pay-check each month," said Candidate Gore in a New Hampshire speech. "You and I know better than that." He may know better, but his stances don't reflect it. He opposes means testing for Social Security and Medicare, arguing that this would "encourage the perception that the program's primary purpose is to serve as another form of welfare."

On welfare reform, Gore has endorsed Moynihan's bill. On health care, it's to his credit that Gore's sometimes willing to anger groups like the American Medical Association. But mostly he focuses on worthy but safe ideas that do not address the larger questions of access. His congressional initiatives have included establishing a national registry to identify bad doctors, providing Medicaid reimbursement for nurse-mid-wives who deliver babies, and strengthening regulations that govern organ transplants. For those who want to save money for nursing home care, Gore has proposed a "long-term care IRA" that would guarantee a 2 percent return after inflation. But what about those without the money or foresight? It's classic Gore--good policy, but limited to tinkering.

Grade: D


"Dick's right with Claude Pepper on Social Security and Medicare," says spokesman Mark Johnson, so much so that the Florida Democrat has endorsed his candidacy. The rest of the script should be dismayingly familiar.

Gephardt strongly opposes means testing of any kind. When Gramm-Rudman first came before the House in 1985, Gephardt worked tirelessly to keep entitlement programs off limits. The final version exempted about 70 percent of the federal budget from automatic cuts, including all major entitlements and COLAs.

He boasts about working to expand Medicare coverage to include eyeglasses, dental work, and preventive care, and has promised to raise Social Security benefits for the disabled to the poverty level. Like Pepper and Simon, he wants to expand Medicare to cover home-based, long-term care. Gephardt also endorses the "goal" of extending Medicare to cover nursing homes but has not explained how he'd finance this costly proposition.

In December, Gephardt unveiled a plan like Kennedy's that requires employers to give their workers health insurance. Gephardt wants the rest of the uninsured to be covered through expanded Medicaid coverage. But he doesn't estimate the cost or offer a way to finance the additional Medicaid expenses. On welfare, Gephardt is in general agreement with the Moynihan bill.

Gephardt's late-breaking advocacy of universal health care coverage counts, but it pales next to his zeal in opposing significant reform in entitlements.

Grade: D

Dukakis: Dukakis opposes any further means testing of Social Security or Medicare benefits. "That would suggest Social Security is a welfare system, not a social contract," said Chris Edley, Dukakis's issues director.

Dukakis's answer to welfare reform is Massachusetts's "E.T." (Employment and Training) program. He boasts that since the program began in 1983, welfare rolls have shrunk by 5 percent and taxpayers have saved $120 million. But there's less here than meets the eye, and critics are right when they say Dukakis is hyping the program. Any state's welfare rolls should shrink during a booming economy; the real question with Massachusetts is why they didn't shrink more. Part of the answer is that this much-vaunted solution to the nation's welfare problem is strictly voluntary. It's a great deal for those who want the job training and free day care. (It's expensive too: average cost per client, $3,500). But the long-term AFDC clients--the real problem--tend to stay exactly where they are now: at home.

Dukakis redeems himself somewhat with his advocacy of a Massachusetts bill that would require employers to provide their workers with insurance while the state covers the rest through the unemployment compensation system.

Dukakis would score a little higher if he didn't misrepresent E.T.

Grade: D

Babbitt: For several years, Babbitt has advocated means testing and he did so as governor of a state famous for its well-to-do retirement communities. Last summer, he took the same message to the national convention of the American Association of Retired Persons.

Babbitt would fully tax Social Security benefits for well-to-do retirees and would make the value of government subsidies for Medicare premiums subject to the income tax. (Last year, the government paid $21 billion so that all retirees could buy health insurance at the bargain rate of $17.90 a month.) He would also freeze COLAs for military retirees until they reach 65--another unpopular notion in a state with so many double- and triple-dipping military retirees. Unfortunately, like all the other candidates, he has not advocated the means testing of COLAs for Social Security recipients and civil servants.

On long-term health care, Babbitt has proposed a $3.5 billion "respite care" Medicare supplement to help families care for the elderly at home. He promises to unveil a more ambitious plan to cover nursing home care later in the campaign, also financed on a means-tested basis.

Babbitt does not support a public works program, but he has proposed several major reforms of the welfare system in addition to those outlined in the Moynihan bill. He would move the entire Medicaid program to the federal level, with uniform eligibility standards, and require the states in exchange to devote about $20 billion in savings to improving education. He would extend Medicaid to include the eight million children who currently live in poverty, as a cost of about $4 billion a year. He also would establish a floor for each state's AFDC benefits. Babbitt has also proposed a means-tested voucher to provide day care for AFDC recipients and the working poor. Babbitt has not proposed any program yet to provide health insurance to cover the uninsured.

Babbitt hasn't gone quite as far as his own logic dictates, but he's the only candidate with the courage to take on entitlements. That alone earns him high marks.

Grade: A

Serve the community

The practical argument for mandatory national service is that there's work to be done. There are bridges that need repair and people who need care, young and old. There are armed forces that need staffing. The philosophical argument is just as compelling: it's healthy for our democracy. What better way to promote community than to instill in young adults the idea that society should expect a modest degree of service from its citizens?

Militarily, national service makes sense. The traditional recruiting pool of 18-year-olds will decline almost 20 percent by the mid-1990s. While today's All-Volunteer Force seems like a success, the armed forces will soon have a tougher time luring young men and women away from private industry, where they will be in increasing demand. Without dramatic pay hikes, those heading for the military will probably boast the kinds of test scores that in the late 1970s caused the Pentagon to rewrite military handbooks to sixth-grade reading levels. A draft might also help put a damper on thoughtless adventurism abroad. Our Persian Gulf policy would be facing fiercer scrutiny now if the fleet were filled with the children of prominent Washington journalists, congressmen, and White House aides.

But only one in four participants in a national service program would need to go into uniform (assuming current force levels). Here at home, others could help repair our crumbling infrastructure, provide child care for working parents, or clean up the environment. Still others could go abroad as Peace Corps volunteers. Why not steal a good idea from Fidel Castro, whose motives may be sinister, but who nonetheless has sent tens of thousands of Cuban teachers, doctors, and engineers to serve in Africa?

A full-scale national service plan would be expensive, at least initially. A conservative estimate is $30 billion a year. But over the long run, these costs would be offset substantially by savings from lower military pay and reduced social service since volunteers would be doing this work at less pay. While critics worry about an army of bored teenagers listening to Walkmans and leaning on rakes, some creative management (like withholding loans and other government benefits) can ensure that the work is both useful and disciplined.

Those who say that 18-year-olds should not bear sole responsibility for the service ethic are right. The rest of us should do our part as well. We could, for example, require professionals with government-sanctioned monopolies, like doctors and lawyers, to perform services for the needy in order to get their licenses renewed. Finally, think of the ripple effect the idea of national service might have in helping Americans come to grips with other difficult decisions. It might be easier to convince the elderly to make some modest sacrifices in entitlement programs if they saw several million young people not only helping them directly but serving their country in other ways too.

The mandatory nature of national service understandably makes some liberals uneasy. But its benefits outweigh its drawbacks. If citizens had to do some service work at one point in their lives, they'd be more likely to serve voluntarily later on. The result would be a healthier, less stratified, democracy. Because national service is expensive, the grading here is somewhat more forgiving.

Simon: In 1985, Simon inserted in the Congressional Record an article praising Gary Hart's proposal for mandatory national service. "Before the decade is out, we will be seriously talking about a draft because of simple demographic factors," Simon predicted. "My own feeling is that if you have a draft, it ought to be universal [and] ought to be for one year with special educational benefits for those who choose the military," he said. "Those who do not choose the military would have to serve one year in a mental hospital, a park district, the Peace Corps, or in some form of public service of their choice."

Simon had the right instincts, down to giving additional benefits to those who choose the more onerous route of military service. But Simon isn't uttering a word about it now, on his travels through Iowa and New Hampshire. "He doesn't think it's necessary at this time," said David Carl, his issues director.

This is unfortunate because if anyone could sell this idea, it's Simon. Simon's campaign has gotten a lot of mileage out of his appeal for the populist wisdom of an earlier era, invoking the memory of Roosevelt and Truman. It was Roosevelt who urged a skeptical Congress to reinstate the draft a year before Pearl Harbor and Truman who urged its peacetime revival in 1948.

Grade: B

Jackson: No other candidate could speak as eloquently as Jesse Jackson about the unfairness of economic conscription. Yet Jackson strongly opposes the draft and endorses the All-Volunteer Force (and the ever-increasing pay that's required to recruit qualified soldiers). Adolph C. Reed Jr., a black political scientist at Yale, chastised Jackson in a recent column. "Today's 'volunteer' army amounts to an economic draft," Reed wrote, "and blacks and Hispanics are disproportionately represented . . . among those called upon to pay the greatest price of adventurism."

Jackson can be eloquent in urging ghetto youth to volunteer to help each other. But his opposition to compulsory nonmilitary service is disappointing. It could bring lots of help into the inner-city and provide an avenue for many youths to get out.

Grade: C

Gore: In 1970, Gore did what few of his Harvard classmates would do: he went to Vietnam. Though his six-month stint as an army reporter was not the stuff of Platoon, it does allow him to speak straight from the heart about the importance of sharing the burden of our national defense.

Gore doesn't oppose a draft outright, but he doesn't support one either. He has chided the rest of the Democratic field for failing to say where the use of American troops might be justified. But if he's going to suggest that he's more likely to use American troops, it's only fair his children should bear the same burden as everyone else's (as he once did).

Similarly, Gore does not endorse compulsory nonmilitary service, though he favors incentives. His most developed proposal promises "GI Bill-type benefits" to young people who assist the elderly in need of long-term care. His campaign staff says a more ambitious plan may follow.

Grade: C

Gephardt: Gephardt talks a good game here. His speeches are sprinkled with appeals to "community" and the "national interest." That's why his failure to come up with a specific plan even for voluntary national service is all the more disappointing. In fact, Gephardt philosophically opposes compulsory service, including the draft.

Gephardt does favor incentives for military service, but these are already in place. "Enlistment bonuses" and "educational loans" are used to recruit men and women into the All-Volunteer Force. He's also called for a "National Literacy Corps," composed of elderly Americans, to eliminate illiteracy by the year 2000. That's fine as far as it goes, which isn't very far.

Grade: C

Dukakis: Dukakis, who was drafted and served as an Army private in Korea, opposes a draft as well as compulsory national service. "The governor's a great believer in voluntarism," said Edley, the issues director. "Mandatory service would be a big intrusion in peoples' lives."

Instead, he supports incentives to encourage young men and women to enter certain careers. For example, his $250 million education program to promote better teaching would include forgivable loans to prospective teachers. Dukakis toyed with the idea of a Police Corps program in Massachusetts that would provide college scholarships to those who pledged to serve later as police officers but has dropped the notion.

Grade: C

Babbitt: Babbitt doesn't philosophically oppose a military draft, but he doesn't think one is necessary right now. As for nonmilitary service, he doesn't like the compulsory approach, preferring incentives to compulsion. Babbitt has urged forgivable education loans for students who choose the military (already in existence, of course), the Peace Corps, or certain careers such as teaching. The problem with tying service to college loans is that it leaves out those who don't attend college, about half the population. Babbitt's loans for teachers, like Dukakis's, could use some kind of "talent test," otherwise much of the money would go to people already entering the profession.

Grade: C

Get serious about the deficit

America's long orgy of "borrow and borrow, spend and spend" finally prompted a rude awakening on October 19, when the stock market crashed. The budget deficit must be cut--substantially --and the candidates should be measured by how well they heed the advice of bank robber Willie Sutton: "Go where the money is." What would they do about entitlement programs, the largest category of federal spending? How would they cut defense spending? What would they do about agricultural subsidies, which now consume one in every 12 tax dollars? And, finally, how would the candidates raise taxes?

Since entitlement programs have been covered in a separate section, let's start with cuts in defense spending. True, the Pentagon has been rife with wasteful spending. But Congress has largely beaten the candidates to the punch. In contrast to real (after-inflation) increases of 7 to 10 percent a year in Reagan's first term, the last two Pentagon budgets have increased slower than inflation. So voters should watch out for promises of exaggerated savings in defense spending. For example, all the candidates agree on cancelling the MX missile, the B-1 bomber, Star Wars deployment, the Bradley Fighting Vehicle, and two new aircraft carriers. But since the cost of these systems is spread out over many years, they are notoriously poor short-term money savers. In FY 1988, cancelling all of these programs would have saved less than $1 billion.

The greatest share of the Pentagon's budget-- where Willie Sutton surely would be headed-- goes to pay and provide for America's 2.1 million active duty troops. The candidates ought to heed Dwight Eisenhower's advice, offered in 1963, and pledge to bring home some of the 350,000 troops stationed in Europe. In addition, we should expect our allies to contribute their share to defense. Our European allies spend about half as much of their GNP on defense as we do; the Japanese spend about one-tenth as much, while they benefit from our protection of their oil supply from the Persian Gulf. We can no longer afford to be the world's police, especially to protect allies whose economies are giving us a beating.

We could save another hefty chunk by reforming the Pentagon's wasteful pay structure--a $74 billion item last year. Every year Pentagon officials cite manpower shortages in a few critical areas to convince Congress to raise military salaries for everyone. It would be cheaper and more effective if the Pentagon would act like any private corporation and target its pay increases to those specialty areas that are experiencing the shortages. Further personnel savings could result from reining in military retirement benefits. (See "Unentitle the unneedy.")

Another large target for those serious about cutting the deficit is the scotch-tape-and-baling-wire arrangement known as the federal "Farm Support System." Last year direct subsidies to agriculture amounted to $25.8 billion, yet there are 39,000 fewer farms this year. We should support farmers, not crops. Too much of our subsidy money goes to large agricultural corporations or millionaires in John Deere hats, not to the family farmer we're supposed to be helping.

Now comes taxes. A previous section made the case for improving the fairness of the tax system. Here the focus is on sufficiency of revenue-- what's the best way to raise revenue without crippling our economy? Beware the candidate who claims he can make a serious dent in the deficit merely by cutting Pentagon waste and a few other budget items. He can't.

Fully taxing Social Security and Medicare benefits for those above the current cap and keeping the top 38.5 percent tax bracket would raise about $26 billion a year. (See "Unentitle the unneedy" and "Tax the wealthy.") Restoring taxes on cigarettes, liquor, beer, and wine to their 1952 level would raise another $12 billion. Taxing the capital gains of inherited stock and placing a modest tax on stock transactions would raise $15 billion. Even that isn't enough. The truth is the deficit is so big the rich and the middle class must contribute. Either they give up such precious benefits as fully indexed COLAs, or they accept some kind of broad-based revenue increase that meets minimal standards of fairness and doesn't harm the economy.

There are innumerable ways to increase revenue. The point here is that when candidates talk about deficit reduction, they have a chance to show some political courage. It is also where a crafty candidate can obfuscate while the deficit gets bigger and bigger. Unfortunately, the latter is what most of the Democratic candidates have been doing.

Simon: Simon is a self-proclaimed "Pay-as-you-go Democrat." By supporting Gramm-Rudman and the balanced budget amendment, Simon's message to conservatives has been "I'm a liberal who's serious about the deficit." But look closely and his message to liberals is, "Just kidding, fellas."

Simon's position on defense boils down to fewer nuclear weapons, more conventional weapons, keeping the military pay system intact, and no U.S. troop reductions without negotiations with the Soviets. It adds up to some savings--but a lot less than the $20 billion Simon suggests when he's asked to give a figure.

Outside of defense, Simon has not proposed a single major cut in a domestic spending program. Indeed, a rough budget based on Simon's pronouncements would produce the biggest deficit of any of the candidates. In addition to his $8 billion WPA-style jobs program, Simon has proposed increased federal spending for student loans, farmers, AIDS, early childhood education, and foreign language teachers. He's even suggested giving free telephones to the poor.

Simon would support new taxes "if they were necessary," but except for raising the cigarette tax, he doesn't think we're at that point. Instead he'd reduce the deficit by "lowering interest rates"-- it's unclear how--and encouraging economic growth. "Cut unemployment in half . . . and the deficit is brought under control," a campaign brochure blithely asserts. It all makes you think that Gephardt's recent quip is right: Simon is more like a "Promise-as-you-go Democrat."

Grade: F

Jackson: Jackson's philosophy on defense spending is "Just Say No." On a questionnaire distributed by the Roosevelt Center for American Policy Studies in Washington, Jackson was 9 for 9 in opposing specific weapons systems, including the F-15 fighter and the C17-cargo plane, which are improvements over what we have now.

The cuts Jackson proposes would save billions, although the short-term savings from the cancelled weapons would be much less than the tens of billions of dollars he suggests. Additionally, he has urged more burden-sharing by our allies, though he is less specific than he was in 1984, when he called for the immediate withdrawal of some U.S. troops from Europe. However, he strongly supports the current military pay system and new across-the-board pay increases for soldiers.

On domestic spending Jackson is like Ado Annie of Oklahoma: He can't say no. True, Jackson's tax-the-wealthy proposal would raise more than $30 billion. But he has urged the creation of a national health care system for everyone, a near doubling of federal aid to education, and vague government initiatives to ensure jobs for every American that wants one. His most detailed proposal--an American investment bank that would "borrow" up to $200 billion in private pension funds--is actually little more than a taxpayer-guaranteed bond program that would likely cost billions in projects that could never pay for themselves (for example, government housing for the poor).

Jackson's instincts for helping the poor and unemployed are commendable, but his skills as an accountant leave much to be desired. Pressed to reconcile his extravagant spending plans with the current budget deficit, Jackson resorts to the standard liberal canard that every 1 percent drop in the unemployment rate reduces the deficit by $30 billion. Not if it costs $50 billion to do it.

Grade: D

Gore: Gore favors "strong presidential leadership" and "tough priority setting" to reduce the deficit. In a major economic speech in December, Gore provided only a few clues as to what this means. He suggested eliminating the Bradley (everyone's favorite bad weapon these days), cutting government payments for unnecessary x-rays, and shifting farm subsidies away from corporate farms. The savings here would certainly be less than the cost of new Gore proposals to fight AIDS, improve education, and encourage Americans to save for college, housing, and long-term health care. Still, it's about the leanest "wish list" in the field.

At least Gore is more candid than most of the candidates about how little he'd actually cut from the defense budget. Citing the Soviet threat, he urges that defense spending be kept "at a constant level, with adjustments for inflation." And that's just for now; once the deficit starts coming down, Gore anticipates the need for "steady, real increases." He also supports existing troop commitments and he has no criticism for the current military pay system.

A classic "last resorter" on taxes, Gore told an audience in San Francisco recently that "my first choice for reducing the deficit is economic growth." Its the same line Ronald Reagan has been feeding us for eight years.

Grade: F

Gephardt: Gephardt's speeches on the budget deficit constantly allude to "tough choices" and just as constantly duck them. Fairly typical was his November 4 speech to the Des Moines Chamber of Commerce, in which he advocated holding federal spending to "zero growth" (after inflation). He offered no examples of actual cuts but sprinkled the address with numerous references to more federal spending, such as investing in the "three T's--technology, training, and teaching."

When it comes to cutting the Pentagon budget, Gephardt wields a butter knife. He "prefers" the Midgetman over the D-5 Trident missile--but he'd build both. He opposes the B-1, but would finish 100 of them before moving on to the Stealth. Gephardt supports the current military pay structure. To his credit he has been a vocal advocate of more burden-sharing with our European allies and Japan, but he hasn't offered any specifics.

On agricultural policy, the Harkin-Gephardt bill might please Iowa farmers, but it's bad for everybody else. The proposal would ostensibly reduce direct federal payments to farmers, but the cure here is worse than the malady. Under the bill, farmers of a particular crop, say corn, could get together and agree to limit production. This way they wouldn't need those big subsidy payments, say defenders of the bill. By limiting production, prices would go up and corn farmers would get more for their crop. But by limiting production, the bill would raise food prices and in doing so act as hidden tax. And it would help soybean magnates as much as the family farmer.

On taxes, give Gephardt some credit for at least proposing something unpleasant: a $5 a barrel oil import fee. Give him a demerit for an idea that would not only be regressive, but would also raise the price of American exports from cars to corn. It's the last thing we need in battling a $175 billion annual trade deficit.

Grade: F

Dukakis: On defense, Dukakis's lists are about the same as everyone else's. He wants to cut the MX missile, Midgetman, B-1 bomber, and Star Wars deployment. He wants to keep D-5 Trident submarine missiles, the Stealth, and SDI research. He supports the military's current pay structure, and he would maintain existing U.S. force levels, at home and overseas. It's all a smart politician's way of tinkering at the edges. But by the candidate's own admission the effect on the budget would be "stability."

When Dukakis was asked during the NBC debate to suggest three domestic spending cuts, he was unable to name even one. On the agricultural programs, he's promised more spending through easier credit and $500 million for community redevelopment grants including aid to hard-pressed farm communities.

As for taxes, Dukakis is disingenuous, all too cleverly dodging the deficit question with his promise to "collect the $110 billion a year in federal taxes that isn't being paid." The estimate is wildly unrealistic, and Dukakis seems to know it. When pressed, his campaign aides provide estimates in the $15-20 billion range in the first year. It's likely to be even less; Dukakis fails to mention the state's history of lax collection which made his success much easier than it would be on a nationwide basis.

Dukakis rightly says it would be irresponsible for any Democrat to rule out new taxes, but he's not about to propose any. His other dodge is to allude to how a growing economy--like Massachusetts's--will generate additional tax revenues. Sound familiar?

Grade: F

Babbitt: There's nothing special about Babbitt's list of defense cuts, although he is more specific than the other candidates about the actual savings in FY 1988 ($9.63 billion). He would not change the military pay system or reduce overseas troop commitments.

On domestic cuts, Babbitt is somewhat bolder. He endorses an alternative to Harkin-Gephardt proposed by Rep. Byron Dorgan of North Dakota. It would limit subsidies to "family farm units" defined according to major crop yields. Production beyond these defined limits would not be eligible for any subsidies. This is exactly what we need--a needs test for farm programs.

More significantly, this July Babbitt courageously proposed a phased-in, 5 percent consumption tax that would eventually raise $60 billion a year. (See "Tax the wealthy.") To suggest that the deficit can be reduced significantly without major tax increases that include the middle class is "flim-flam," he says. He's absolutely right.

Like other candidates, Babbitt has proposed his share of new spending initiatives, including free health care to all children living in poverty ($4 billion) and means-tested day care vouchers ($1-2 billion). But he's at least had the candor to try to bring some balance to the accounts.

Grade: B

Table: The Grades Are In. . . .
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Title Annotation:includes related article on Gary Hart
Author:Keisling, Phillip
Publication:Washington Monthly
Date:Jan 1, 1988
Previous Article:NO wonder the ratings are law; Thomas Jefferson refused to give a State of the Union Address; maybe that wasn't such a bad idea.
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