THE ECONOMY

Key Questions:
How does the United States generate long-term robust economic growth, with low inflation, low unemployment and low interest rates? How do we make sure that economic policy is fair to all Americans, and that working people feel some sense of security in their jobs? What role does the federal government play in setting economic policies to make the above goals achievable?

Tax Cuts
One key area for policy debate is tax cuts. Bob Dole made deep tax cuts the centerpiece of his presidential campaign, starting with a fifteen percent across-the-board cut in income tax rates. Those cuts were necessary, he said, to stimulate the economy to reach annual growth of 3 or 3.5 percent from the 2 to 2.5 percent we have been sustaining in recent years. The additional growth would mean more and better jobs, and more revenues into the federal government to help balance the budget and fund necessary programs. Dole has also favored a series of other tax cuts, including a $500 per child tax credit. Congressional Republicans have also favored deep tax cuts, although somewhat less than Dole’s in their budget plan in the 104th Congress-- $245 billion over seven years, as compared to Dole’s roughly $500 billion over six years. Republicans also believe that tax cuts will mean less government-- they start with the premise that the money belongs to the taxpayers, not to the government, and more ought to stay with them, with less available for government to spend.

Democrats are not against tax cuts; President Clinton and congressional leaders have endorsed the $500 child credit, and have their own tax cut proposals, including a tax credit for college tuition and a bigger capital gains break for home sellers. But Democrats do not believe that big tax cuts will be fiscally responsible; they think the across-the-board tax cuts will not bring in enough revenue, and that they will lead to much bigger budget deficits. They also fear that the big tax cuts will starve important areas of government that should be funded. And they argue that the tax cuts will benefit the wealthiest, with little of the benefit going to the poor or the lower middle class.

Tax Reform
Another area of controversy is tax reform. Republicans have made dramatic overhaul of the income tax system a key part of their economic plan, with many important Republican congressional leaders supporting a flat tax, with few deductions and a single low rate of between 17 and 19 percent. Congressional Republicans moved to cut the budget of the IRS, and Bob Dole, to congressional GOP applause, pledged to “end the IRS as we know it.” Some Democrats, including Minority Leader Gephardt, favor a flatter tax, with perhaps three rates, and favor lowering rates and broadening the tax base by taking away some deductions. But their approach is more less radical reform, and more generally, tax reform is not a high priority for Democrats as it is for Republicans. Democrats generally fought against cuts in the IRS budget.

Deficit Reduction
There are sharp differences between the congressional parties on deficit reduction. At this point, both parties have endorsed the goal of balancing the budget in seven years or less using Congressional Budget Office numbers. The Republican budget plan in 1995-96 was based on a combination of tax cuts and budget cutbacks, with different priorities than the Democrats. The Democrats combined smaller tax cuts with smaller spending cutbacks. Republicans moved to eliminate the Commerce Department, with the professed goal of eliminating other Cabinet departments like Energy and Education, and programs like the national service corps. They also proposed cutting the future growth of Medicare by $270 billion. Democrats proposed much smaller cutbacks in domestic programs like education and legal services, and much smaller changes in Medicare and Medicaid. The Republicans strongly support a Constitutional Amendment to balance the budget; most Democrats oppose the Constitutional Amendment.

SOCIAL POLICY

Key Questions:
How does the federal government defend or express American values like equality of opportunity, the work ethic, disapproval of out-of-wedlock births and support for the traditional family structure, the right to life and the freedom of choice? How do policymakers respond to the anxieties Americans feel about health care, education or the environment?

These questions underscore the many, many issues that can fall under the rubric of social policy, from race and affirmative action to abortion, welfare, health policy, immigration, the environment, education, the underclass, families, and the underlying value structure.

Welfare
Welfare reform was the most visible social policy issue on the congressional agenda in 1996. Virtually every congressional Republican supported the welfare reform bill that President Clinton signed in August; congressional Democrats were almost evenly divided for and against. But Democrats have generally supported providing more protection for children on welfare, more funding for child care for women who go off welfare and go to work, and have opposed taking welfare away from legal resident aliens; all positions opposed by most Republicans. Democrats have been more reluctant to give blanket authority to the states to restructure their welfare programs, including free rein to take all benefits away from some poor recipients; the move of authority to the states has been the centerpiece of Republican efforts. More generally, Republicans see welfare reform as the key way to get at the problem of out-of-wedlock births, by taking away welfare benefits to teenage mothers who have additional out-of-wedlock children. Democrats tend to oppose taking the benefits away from the out-of-wedlock children, saying they are innocent victims.

Health Care
Democrats and Republicans supported the Kennedy/Kassebaum health bill that passed Congress this summer. But the congressional parties have faced off over Medicare and Medicaid-- with Democrats criticizing Republicans for trying to “gut” Medicare to pay for tax cuts for the rich, and Republicans retaliating that their plan doesn’t cut Medicare but allows it to go up 7 percent a year, that the so-called cut is not in today’s dollars but adjusting for future inflation, and that their plan has per capita Medicare expenditures going up as well. Republicans want to give Medicaid authority to the states, like welfare, and Democrats are opposed. And Republicans, of course, opposed uniformly President Clinton’s comprehensive health plan in 1994. Democrats have vowed to come back with a new and more modest health reform plan, to provide some coverage for the uninsured, in the next Congress.

Immigration
Republicans have tended to be tougher on immigration restrictions than Democrats, including very tough penalties directed at illegal immigrants as well as the above-mentioned restriction of benefits to legal immigrants and tough caps in new immigration.

Environment
Democrats have been more supportive of strict environmental regulation, while Republicans have tried to put strong curbs on the authority of the EPA.

Education
Democrats have supported federal standards for education (the Goals 2000 program,) and Republicans have been opposed, and Democrats have supported much more federal funding in education than Republicans. Education funding is basically a local issue with the Congress providing less than ten percent of the money for elementary and secondary education; however, the difference in spending priorities between the two parties over seven years amounts to a considerable sum (an estimated $30-40 billion).

Family Values
Both parties have tried to position themselves as the party of the family. The Democrats have as their major campaign initiative, their equivalent of the Contract with America, a Families First agenda, including expanded family and medical leave, more federal funding in areas like Headstart, and a variety of tax credits to protect working families and help them with things like college tuition. Republicans have stressed their $500 per child tax credit, as well as their welfare reform ideas, and have pushed a bill to prevent single-sex marriages as a threat to the traditional nuclear family.

Abortion
The most contentious social issue is abortion, where most congressional Republicans oppose abortion, have voted to cut off Medicaid funding for abortions and have supported a Constitutional Amendment to ban abortions.

Affirmative Action
Most Democrats are pro-choice and have taken opposite positions. Republicans have increasingly been vocal about ending affirmative action; Democrats have been divided, but generally support President Clinton’s aphorism, “Mend it, don’t end it.”

AMERICA IN THE WORLD

Key Questions:
What role should America play in the post-Cold War world? What, in other words, does a Superpower do in a world no longer defined by superpower conflict? These questions play out on a turf that includes defense and diplomacy as areas for disagreement.

Defense
Congressional Republicans favor a stronger defense, via more defense spending, than do Democrats. In particular, Republicans want full funding and quick deployment for a missile defense system, more popularly known as SDI or “Star Wars,” while Democrats want to curtail funding and delay deployment.

Role in the World
Republicans are critical of Clinton’s attempts to curtail or deter international terrorism and the drug trade, have been hostile to funding any American participation in multilateral organizations like the World Bank or the International Monetary Fund, and have failed to provide back dues for the United Nations. Both parties have their internationalist and isolationist wings, but the more junior Republicans have been especially skeptical of an assertive American presence abroad.

Trade and Foreign Aid
Both parties also have their free trade and projectionist wings; here, the senior Democrats have been most skeptical of GATT, NAFTA and the World Trade Organization. Democrats generally favor more resources for diplomacy abroad, more foreign aid, including multilateral aid, and a streamlined defense budget; Republicans want a stronger defense and less money for diplomacy and foreign aid.

GOVERNANCE

Key Questions:
How can we make our political institutions work, balancing efficiency and fairness, deliberation and responsiveness to public views? How can we maintain ethical standards in politics and prevent corruption and undue influence by special interests? How can we prevent gridlock between the parties and between Congress and the White House? How can we keep excessive partisan and ideological bickering from poisoning the policy process?

Congressional Reform
Both parties proclaim themselves as reformers. In their first majority in forty years in the House in 1995, Republicans started with a spate of internal reforms, including having Congress abide by the laws and regulations it has enacted for the private sector (the Congressional Accountability Act,) cutting the number of committees and streamlining the rules, and reforming the administrative structure of the House. Democrats say that they had passed the Congressional Accountability Act in 1994, and that Republicans killed it at the end of the session so that they could take credit for its passage the next year, that they had reformed Congress frequently in the past, and that the Republican reforms have created a less fair, less open and more partisan institution. Partisanship and bickering have been high in the past several years yet both parties proclaim their desire to have more bipartisanship and more civility.

Reinventing Government
Democrats have supported President Clinton’s Reinventing Government Initiative to make the executive branch more responsive to its “customers” by building in more streamlined administrative efficiency. Republicans have turned more to regulatory reform, which has generally meant curtailing the authority of regulatory agencies like the Environmental Protection Agency and the Food and Drug Administration, and to plans to dismantle a series of Cabinet departments, starting with Commerce but including Education and Energy. In general, the Republicans want not just less government, but also to let the markets operate with minimal government interference. They advocate taking power away from federal regulatory agencies and support tort reform making it harder for individuals to sue companies for damages. Democrats want a more assertive government role in regulation of business and protection of workers. Both sides supported the line-item veto, but Republicans have done so with more enthusiasm.

Campaign Finance Reform
Both parties have professed support for campaign finance reform, although nothing has been done. Democrats have somewhat different ideas in this area, supporting spending limits and some public funding, while Republicans oppose spending limits and public financing, and support eliminating political action committees (PACs), increasing the limits on individual contributions above the current $1,000, and requiring that 60 percent of a campaign’s funding come from the candidate’s district or state.

Gridlock
On the more general issue of gridlock, each party says it can best end gridlock, especially if it has its own president. Many Republicans in 1993-94, at the time they voted to kill the Clinton health care plan, said good things about gridlock, but many of the same legislators proudly talked about how they had broken gridlock with the passage of the minimum wage, health reform and welfare reform in July and August. Democrats have tended to support reform of the Senate’s filibuster rule, so that legislation could move more easily with a simple majority, while Republicans have tended to support the existing filibuster. Whether Democrats and Republicans could make a case for policy progress under divided government is an interesting question.