Deficit reduction takes priority in Kerry campaign
WASHINGTON -- Some education advocates got a rude shock last Wednesday when they logged onto JohnKerry.com: The candidate's much-touted plan to provide free college tuition to those who commit to two years of national service had been wiped off the screen, replaced with a scaled-down version.
Gene B. Sperling, the former Clinton economic chief who coauthored Kerry's plan to reduce the deficit, helped press the delete key. He advised the presumptive Democratic nominee to commit himself to a pay-as-you-go government, putting fiscal responsibility ahead of spending hikes on higher education, national service, housing, and local aid as campaign priorities.
''Fear not, I am not somebody who wants to go back and make the mistakes of the Democratic party of 20, 25 years ago," Kerry declared on Thursday, adding that he is not a ''redistributive Democrat," even though his $30 billion National Service plan had been regularly invoked in the Democratic primaries to trump a similar but less-generous tuition plan offered by Senator John Edwards of North Carolina.
Kerry's decision to place deficit reduction at the heart of his campaign seems to settle the debate over whether the Democratic Party would ''change" for this election, reaffirming its progressive roots and moving away from Clinton's centrism. During the primaries, former Vermont Governor Howard Dean attacked the Democratic Leadership Council as ''GOP lite."
Yesterday, DLC president Bruce Reed declared, ''I think that Kerry has always been a reform Democrat and he's running a solid New Democrat campaign. The country's in desperate need for a return to fiscal discipline."
The economic plan was clearly a victory for centrist Democratic policy makers who leaned toward Edwards and Senator Joseph I. Lieberman of Connecticut in the primaries. And even Kerry's supporters concede it's a defeat for progressives, including some in the Kennedy camp, who helped Kerry supplant Dean as the party's front-runner.
By committing himself to pay-as-you-go government -- with all spending initiatives measured against their impact on the deficit -- Kerry has imposed an immovable barrier to significant new spending on liberal initiatives, according to fiscal specialists.
Two more of Kerry's campaign promises, to beef up preschool education and increase aid to cities and states, will be scaled back, campaign officials acknowledge. And every area other than national security and education collectively will be capped at the rate of inflation, meaning that energy assistance, small-business programs, AIDS prevention, housing, and other Kerry promises will be budgeted with only minimal hikes over existing funding.
''Clearly there are areas like college aid and national service where he'd like to do more, but he realizes to fit it in an inflation-based spending cap he'd have to find other areas to cut," said Sperling.
Moreover, Kerry's embrace of another staple of the 1992 Clinton campaign -- a middle-class tax cut that goes further than the Republicans -- will take away an additional chunk of the cash, partly offsetting increases in revenues from repealing Bush's tax cut for those earning more than $200,000.
Kerry's progressive supporters, who acknowledge having different spending priorities, seemed to balance their disappointment with the hope that Kerry's fiscal restraint will help him get elected.
''Did everything he say make me jump for joy? No," said US Representative James P. McGovern of Worcester. ''But I think he was trying to be responsible."
Added McGovern: ''I'm horrified at how we're shortchanging education, environmental protection, veterans' medical care, and Section 8 housing vouchers. Kerry will put more money in these areas, but he's not going to overpromise. In the long run, when the fiscal situation is straight, maybe there will be more money for those areas."
Still, McGovern said, ''If I were president, I might give a different speech, but I might carry one state."
Kerry's commitment to pricing out all his promises is unprecedented for a presidential challenger, according to his campaign. But Bush and the Republican leaders of Congress won't be operating with the same constraints, freeing them to make bolder spending promises.
While Kerry clearly intends to seize the fiscal high ground, some budget analysts suggest he may have hemmed himself in too much. By imposing tax cuts while raising spending, Republicans constructed a political box that Kerry is now sitting in.
''He's in a tight spot, where if he does more to raise revenue, he'll be hammered for raising taxes in a major way. But if he doesn't, we are in an environment of very constrained fiscal resources and the need to limit any new initiatives," said Isabel Sawhill, former associate director of the Office of Management and Budget in the Clinton White House.
Moreover, Sawhill said, Kerry's discipline may not be shared by Congress, even if he were elected president. The Senate, with a slender Republican majority, has indicated a willingness to restore pay-as-you-go guidelines to budget debates of the type engineered by the first Bush administration and continued through the Clinton years. The GOP-led House has not.
Sperling, who is Kerry's senior economic adviser, said he believes Kerry's plan will inspire Congress to abide by similar rules, no matter which party controls.
''When a president is willing to live by budget rules and pay-as-you-go principles, it leads to a mutual commitment to fiscal discipline," Sperling said. ''As we've seen under President Bush, once a president says his priorities don't need to be paid for, it creates a bidding-war environment."
But even Sperling acknowledged that the Democratic primary campaign became something of a bidding war itself, with candidates offering nods to fiscal discipline while proposing fat new programs, especially in education and national service. Kerry's $30 billion plan was a staple of his campaign speeches and was touted in dozens of newspapers articles. Now it's been scaled back by almost two-thirds.
''There's greater scrutiny on cost and specifics when a candidate gets to the general election," said Sperling, who advised many Democrats during the primaries. ''I think that really is a normal cycle -- candidates present themselves on key issues in the party to identify who they are and what they stand for, but with the multitude of candidates there's less attention to cost."
Now, he said, Kerry has decided ''that even his most cherished priorities have to live under fiscal rules." 