Mr. Kerry's Deficiency

Published: April 8, 2004

RUNAWAY DEFICITS, says Sen. John F. Kerry (D-Mass.), are a "fiscal cancer" that threatens the nation's prosperity. He accuses the Bush administration of reckless and dishonest budgeting. We agree with both assertions -- which is why we were disappointed by the alternative the Democratic presidential nominee set out in a speech at Georgetown University yesterday. A Kerry budget would make far better use of the resources available, but it wouldn't do much more to tackle the deficit than the Bush budget. And Mr. Kerry's contention that he would cut the deficit in half in four years is subject to the same criticisms of unrealistic expectations and avoidance of known costs that we have so often leveled at the Bush administration.

The major budget difference between the two candidates comes down to this: President Bush proposes cutting taxes by a huge amount over the next decade ($1.24 trillion); Mr. Kerry proposes cutting them by an amount about half as huge (about $640 billion, according to preliminary estimates by the Urban Institute's Leonard Burman). But Mr. Kerry would then spend most of the difference between his tax cut and the Bush cut on health care and education. The Kerry plan would be fairer and a wiser use of the money. It's better to take away tax cuts for the wealthiest Americans and spend it on health care for the uninsured. But in terms of the deficit that Mr. Kerry correctly paints as such a peril, the Kerry plan falls short.

Indeed, Mr. Kerry's assertion that he would cut the deficit in half in the next four years is flawed for many of the same reasons as Mr. Bush's analogous assertion. The four-year window is misleadingly narrow, because -- as with the president's -- the costs of Mr. Kerry's tax plan explode after that. Mr. Kerry's proposed changes in the current tax law would save about $25 billion through 2009 but would cost more than $640 billion over the full 10 years. And Mr. Kerry's calculations -- like Mr. Bush's -- don't take into account known or likely costs, such as fixing the alternative minimum tax or extending expiring business tax breaks (though Mr. Kerry, unlike the president, does provide money for Iraq in his calculations).

Mr. Kerry positions himself as a champion of fiscal discipline, but his assertions are undercut by his fine print. He says he'll reinstate "pay as you go" rules for tax cuts as well as spending increases -- but he excludes from that needed discipline the tax cuts he proposes. Mr. Kerry knows better: He voted just a few weeks ago for a real pay-as-you-go measure as part of the Senate budget resolution. His roster of possible savings -- cut the federal government's electricity use by 20 percent, freeze the federal travel budget, reduce the number of outside government contractors -- is gauzy, to say the least. In any event, that money is to be used to pay for other discretionary spending proposals. It's good that Mr. Kerry recognizes that he may need to scale back on some earlier campaign pledges -- he mentioned national service and universal preschool yesterday -- but that doesn't exactly constitute deficit reduction.

Mr. Kerry says he'll do that by going after corporate welfare, and he proposes a commission that would force Congress to take an up-or-down vote on wasteful programs it identifies. Fine, but easier said than done. And his promises of tens of billions of dollars a year in savings would have more credibility with some specifics attached.

"We cannot restore fiscal responsibility in this country unless we have a president . . . ready to be straight with the public about what we can and can't afford," Mr. Kerry said yesterday. Mr. Kerry has some work to do before he can claim to be living up to that standard.