August 11, 2000
Business correspondent Paul Solman examines Al Gore's economic plan on a tour through Los Angeles.
PAUL SOLMAN: 1996, the Democrats convened in Chicago. There, at the airport, the head of President Clinton's National Economic Council, Laura Tyson, began her show and tell of what the party had done for the economy since 1992.
LAURA TYSON (in 1996): Well, I think the main thing we've done is put a very firm foundation for private sector growth by reducing the deficit. That's helped bring interest rates down, that's helped spur an investment-led economic expansion.
PAUL SOLMAN: This year, the Democrats are convening in Los Angeles, and Vice President Gore's explainer for economic policy is... Laura Tyson, now dean of the business school at Berkeley.
PAUL SOLMAN: So the last time we were together was four years ago, before the convention in Chicago. So what have you Democrats done for the country since?
LAURA TYSON: Well, we've had the longest and strongest economic expansion in the nation's history: 22 million jobs, an unemployment rate of 4 percent, and we've had investment really driving this economy through the health of high technology industry and the change in the American economy that it has triggered.
|The surprises of an animated economy|
PAUL SOLMAN: If it all sounds almost too familiar, well, say the Democrats, that's because they've done such a good job. Prosperity is no longer a surprise, but it makes the surprises of an animated economy possible. At the movie animation firm Rhythm and Hues, for instance.
JOHN HUGHES: This is how we start; we start with a model. We draw these lines here so that we can encode into the computer, and then inside the computer we make it talk.
VOICE IN MOVIE: If you're out there, who's that in there?
PAUL SOLMAN: This is the movie "Babe," for which Rhythm and Hues won an academy award.
DOG TALKING: Well, what did your mother call to you tell you apart from your brothers and sisters?
PAUL SOLMAN: I had actually thought the dog was real, and deserved an Oscar of its own.
PIG: She called us all Babe.
PAUL SOLMAN: Computer animation has ushered in a new era on the once-silver screen -- from science fiction to "The Flintstones" and their perky pet, Dino, the dinosaur.
COMPUTER ANIMATOR: Dino is here is computer graphics. Of course you can see the chain is computer graphics as well.
PAUL SOLMAN: The Democrats say that ending Republican deficits has unleashed the new economy. A balanced budget has encouraged those capitalist bedrocks -- optimism and runaway investment.
JOHN HUGHES: This is high-tech entertainment, and it's air conditioning, and it's computers and it's disks and...
JOHN HUGHES: We spend millions of dollars every year on computers. So being able to get financing at reasonable interest rates is very important to us. And that's the thing that I think has been very successful under Clinton-Gore. We've had a long period of relatively low interest rates.
LAURA TYSON: Investment in equipment, computer equipment and software has accounted for about half of all the investment in the economy during this expansion. So it's both driven the prosperity of the economy overall, but it also has driven the competitiveness of the U.S. economy in this very important growing area of the world.
|A tax cut for whom?|
PAUL SOLMAN: To Democrats like John Hughes, Laura Tyson, and Vice President Gore, though, uneven prosperity and competitiveness makes for a dog-eat-dog world. They think the market must be tamed by a government that encourages companies like this one to be compassionate -- a word the Democrats think the Bush campaign is using mainly for PR. The main difference between the two parties this time around, says Tyson, is over the Republican tax plan -- fiscally irresponsible, she thinks -- uncompassionate, unfair. The Republicans are pushing a tax cut for everyone that would supposedly benefit low-income workers such as those here at the Bank of America.
LAURA TYSON: Yes. The income tax rate across the board cut proposed by George W. Bush, will indeed help all income groups. However, the amount of money that a lower income family will get from such a tax rate cut is about $43 a year.
PAUL SOLMAN: $43 for the family?
LAURA TYSON: For the family. Okay. The amount of money someone at the top, top 1 percent of the income distribution gets from this marginal tax rate reduction is in the nature of $50,000 or more.
PAUL SOLMAN: $50,000.
LAURA TYSON:A year, per family -- $50,000 a year for the rich family versus $43 a year for the poor family.
PAUL SOLMAN: Tyson says that Republican tax cuts eat up most of the projected budget surplus, while the Democrats' tax cut is targeted to the less well off. Vice President Gore wants to preserve much of the surplus to pay down the national debt and spend on health, education, and welfare reform. Check processor Teresa Estrada spent most of her adult life on welfare.
PAUL SOLMAN: What got you from welfare to work?
TERESA ESTRADA: I tried to do it on my own, tried to find a job on my own. It was hard. I didn't have the skills, I didn't have anything to offer. I felt alone and no one was there to help me go through that process of... how can I put it... interviews, resumes, how to present yourself to employers. Going through this program helped me a lot, communicate with people --
LAURA TYSON: One of the accomplishments of the Clinton and Gore administration has been meaningful welfare reform, and there has been a dramatic decline in the number of Americans on welfare. It is now the lowest that it's been in 30 years. Where have those people gone? They've gone to work. How have they gone to work? They've gone to work with the help of training programs, and now have non-subsidized jobs that help them into the middle class.
PAUL SOLMAN: But as the Republicans would say, "Hey, we're the party that really forced welfare reform and made it happen."
LAURA TYSON: The record on this is clear. The president came to office committed to welfare reform. There was a huge struggle over the terms of that welfare reform. How much money should be there for childcare? Should there be training monies put in? Once that fight had been won by the president and vice president, we have in place a welfare reform that can work.
|Money for education|
PAUL SOLMAN: The Democrats want to spend money on welfare and on education, and in education, says Ted Mitchell, president of the exclusive LA College Occidental, government is key at every level.
THEODORE MITCHELL, President, Occidental College: One of the frauds that it's perpetrated on kids in middle school and high school is any college will do. And while it's true that any college is better than no college, one of the things that we are seeing is a distancing of the top tier institutions from others. And we need to do all we can to prepare kids to be ready for those top-tier institutions, even if they don't make the choice to go there.
PAUL SOLMAN: Anthony, could you have gone to Occidental without the programs that are currently in place?
ANTHONY OROZCO, Sophomore, Occidental College: No, I knew if I wanted a first-rate college experience such as Occidental could offer me, I knew had to apply for the federal Stafford loan, the plus loan, the federal work-study. And through those sponsored programs, that's the only way I could have gone my freshman year.
KAREN SCHOENROCK, Senior, Occidental College: It's not only being able to afford going to college. It's also being able to stay in college. For example, my dad became unemployed, and federal money came in with the Pell Grant and I could stay in college, whereas I would have to withdraw without it.
LAURA TYSON: I mean I went to graduate school entirely financed by the US Government. It was a grant, a National Defense Education act. I think I've paid back a lot to society in terms of income tax, productivity, involvement.
PAUL SOLMAN: I think it's possible that a Republican watching it would say the investment in you had a negative effect.
LAURA TYSON: I have made that joke before, and you're right. But the point is that it's an investment in the nation by investing in individuals. And that's, I think, a very important way of thinking about this.
|Putting money away for health care|
PAUL SOLMAN: Tyson says that the Democrats have committed more money to higher education than the G.I. Bill, as well as supporting programs all the way down to Head Start. And then of course the Democrats want to spend on health care.
MAN: That issue, my drug bills would be way over $5,000.
PAUL SOLMAN: The Democrats' major health initiative, expanding Medicare to help the elderly pay for long-term treatment and prescription drugs.
DR. ALISON MOORE, UCLA Medical Center: I see regularly my patients having to substitute more effective medicines with less effective medicines because of the cost -- patients telling me that they're skipping doses of medicines because they have been unable to - you know -- afford the next month's supply of medicines, asking me regularly, is there any way I can cut out any of these medicines. So it's becoming increasingly difficult to try to take good care of patients, especially those with increasing numbers of illnesses.
PAUL SOLMAN: The vice president proposes spending $250 billion over the next ten years to address this problem, as well as saving the current Medicare surpluses for the next generation of elderly.
LAURA TYSON: That's going to be you and me. So we've got to... start saving these monies, these surpluses now so that when you and I come in to claim the system, we actually have money to provide for hospitalization and all the other benefits that Medicare currently covers. So this is in addition, prescription drug coverage is in addition to all those things.
PAUL SOLMAN: Last stop: the Staples Center, home of the LA Lakers and the Democratic Convention.
PAUL SOLMAN: So at the end of the day, literally and figuratively, what is the difference between Al Gore's economic program and George W. Bush's?
LAURA TYSON: You know, I think it's a very clear-cut distinction. I think you can begin with the simple distinction between commitment to fiscal responsibility, which the vice president brings to us, and going back to supply-side tax cuts and threats of large deficits. That is a major and defining difference because the foundation of the longest and strongest economic expansion this economy has ever enjoyed has been the commitment to fiscal responsibility of the Clinton and Gore administration. That's something that Gore will continue.
PAUL SOLMAN: And to continue the economic policies of the past eight years is what the Democrats hope will keep them on top for another four.