In the campaign, in addition to the budget cuts,... In the campaign, in addition to the budget cuts, I had also proposed raising a comparable amount in new revenues, all from wealthy individuals and corporationsNow, to cut the deficit in half we would have to raise more revenues, tooAnd we would almost certainly have to scrap the broad-based middle-class tax cut, though I was still determined to cut taxes for working families earning about $30,000 a year or less by doubling the Earned Income Tax CreditThose peoples incomes had been losing ground for twenty years, and they needed the help; moreover, we had to make lower-income jobs more attractive than public assistance if we were to be successful in moving people from welfare to workLloyd Bentsen went over the list of possible tax increases, saying that any tax would be hard to pass and the most important thing was to prevailIf our plan failed in Congress, it could endanger my presidencyBentsen said we should present a number of options to Congress, so that if I failed to pass one or two, I could still claim success and avoid being crippled politically
After the tax presentation, Roger Altman and Larry Summers argued for a short-term stimulus package to go with the deficit-reduction planThey recommended about $20 billion of spending and business-tax reductions that at best would give the economy a boost, and at the least would prevent it from sliding back into a recession, which
louis vuitton duffle bag they thought was about a 20 percent possibilityThen Gene Sperling made a presentation of options for new investments, arguing for the most expensive one, about $90 billion, which would meet all my campaign commitments immediately
After the presentations, I decided the deficit hawks were rightIf we didnt get the deficit down substantially, interest rates would remain high, preventing a sustained, strong economic recoveryAl Gore strongly agreedBut, as we discussed how much deficit reduction we needed, I was concerned about the short-term drag that Laura Tyson and Alan Blinder predictedand Roger Altman and Gene Sperling fearedmight occurAfter nearly six hours, we were headed in the deficit-reduction directionClearly, economic policy making, at least in this environment, was not science, and if it was art, it had to be beautiful in the eyes of the beholders in the bond market
A week later, we held a second meeting in which I abandoned the middle-class tax cuts; agreed to look at savings in Social Security, Medicare, and Medicaid; and supported Al Gores suggestion of a broad-based energy tax, called a BTU tax, on the heat content of energy at the wholesale levelAl said that while the BTU tax would be controversial in states that produced coal, oil, and natural gas, it would fall on all sectors of the economy, lessening the burden on ordinary consumers, and would promote energy
balenciaga handbags motorcycle conservation, something we badly needed more of
For several hours more, we again debated how much deficit reduction we had to try for, beginning five years out and working back to the presentGore took a hard line, saying if we went for the biggest possible reduction, wed get credit for courage and create a new reality, making it possible to do previously unthinkable things, like requiring Social Security beneficiaries above a certain income level to pay income tax on their benefitsRivlin agreed with himBlinder said it might work if the Fed and the bond market believed usTyson and Altman were skeptical about avoiding short-term economic contractionsSperling and Reich, who was present at this meeting, held out for more investments
So did Stan Greenberg, Mandy Grunwald, and Paul Begala, who werent part of the meetings and were afraid I was sacrificing everything I believed in under the influence of people who werent part of our campaign and didnt care about the ordinary Americans who had elected meIn late November, Stan had sent me a memo saying my honeymoon with voters would be short-lived unless I moved quickly to address the problem of jobs and declining incomesSixty percent of those who said their finances had worsened in 1992, about a third of the electorate, had voted for meHe thought I could lose them with this planGeorge Stephanopoulos, who sat in on the meetings, had to try to explain to
tiffany diamond Stan and his allies that the deficit was killing the economy, and that if we didnt fix it, there would be no economic recovery and no tax revenues to spend on education, middle-class tax cuts, or anything elseBentsen and Panetta wanted as much deficit reduction as we could pass in Congress, an amount less than Gore and Rivlin advocated, but still a lotRubin, as moderator, was again keeping his own counsel, but I sensed he was with Bentsen and PanettaAfter hearing everyone out, so was I
At some point, I asked Bentsen how much wed have to reduce the deficit to rally the bond marketHe said about $140 billion in the fifth year, with a five-year total of $500 billionI decided to go with the $500 billion figure, but even with new spending cuts and revenue increases, we still might not be able to meet the target of cutting the deficit in half by the end of my first termIt all depended on the rate of growth
Because of the possibility that our strategy would produce a short-term slowdown, we searched for ways to promote more growthI met with executives of the Big Three automakers and Owen Bieber, president of the United Auto Workers, who said that while Japanese cars had almost 30 percent of the American market, Japan was still largely closed to American cars and auto-parts suppliersI asked Mickey Kantor to find a way to open the Japanese market moreRepresentatives of the fast-growing
fairy bag prada biotechnology industry told me that our research-and-development tax credit should be extended and made refundable for young firms, which often didnt make enough money to claim the full credit under current lawThey also wanted stronger protection for their patents against unfair competition, and modifications in and acceleration of the product-approval process of the Food and Drug AdministrationI told the team to analyze their proposals and make a recommendationFinally, I authorized the development of the $20 billion one-shot stimulus proposal to increase economic activity in the short run
I hated to give up the middle-class tax cut, but with the deficit numbers worse, there was no choiceIf our strategy worked, the middle class would see direct benefits worth far more than a tax cutin the form of lower home mortgages and lower interest rates on things like car payments, credit card purchases, and student loansWe also wouldnt be able to increase spending as much as I had proposed in the campaign, at least at firstBut if deficit reduction brought interest rates down and growth up, tax revenues would increase, and I could still meet my investment objectives over four years
There was also another big ifThe strategy would work only if Congress adopted itAfter Bushs defeat, the Republicans were more anti-tax than ever, so few, if any, of them would vote for any plan I put up with new taxes in
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