Committee Of Correspondence

Advice for Dole

Bob Bartley

9:24 a.m.  Tuesday  7/30/96

Seems as though yesterday I got tagged as a policy wonk, so I want to make clear I really do care about personality and character. Indeed, I think they may be decisive in the election, though not in governing afterward. But the issue is not Bob Dole’s character, which is just fine. Indeed, I wouldn’t be surprised to find that his been-there, done-that attitude grows on a public itself jaded with politics. Elections are typically a judgment on the incumbent, and the real issue is Bill Clinton’s character. The only problem for Dole is how to raise the delicate matters bandied about by the likes of Anthony Marceca, James McDougal, Gary Aldrich and Paula Jones. The problem is that the public has trouble distinguishing between the blizzard of ethics charges that have become a staple of our politics, and the abuse of office we’ve seen in the Clinton and Nixon (sorry Herb) administrations. This has reached the point where it affects the ability to govern. The TWA crash and Atlanta bomb are before us, for example. But does anyone, let alone the GOP, really want to entrust new wiretapping powers to an FBI that delivers its background files to Craig Livingstone? (See Tuesday WSJ editorials, ” Mr. Livingstone, We Presume” and ” Just a Minute.”) But how do Republicans deal with this? The “You’re In the Army Now” commercial was both negative and funny. Not bad. Perhaps Billy Dale could be invited to speak at the Republican convention about his Travelgate acquittal. Come to think of it, Mrs. Jones now lives somewhere within driving distance of San Diego. The basic strategy is to go negative just enough to outrage the media, then let them spread the message as they blast you. It worked fine for Floyd Brown with his Willie Horton commercial, broadcast once on some cable channel in Illinois. (Too bad Roger Ailes got the blame.) Come to think of it, Mr. Brown is still around. Same tactic seems to have worked for Mr. Aldrich, whose “Unlimited Access” was panned by critics such as George Stephanopoulos, but is about to sweep the number-one listing on all best-seller lists. So we will know the public is being properly educated about character when we read the headline, “Dole Goes Negative, Gasp.” Christopher DeMuth

9:54 a.m.  Tuesday  7/30/96

My three fellow correspondents urge that Bob Dole should be true to himself, let the real Dole shine through, and ignore the pollsters and spinmeisters. That is excellent advice as far as it goes. But it is seriously incomplete in two respects. First, the advice is no doubt inspired in part by the circumstance that the three know Mr. Dole personally, and know him be an unusually fine and admirable individual: a very different man than the one portrayed by the national media. So the problem is not just that Mr. Dole is suffering from excessive “handling,” but that the media, intensely committed to President Clinton’s re-election despite all denials, systematically employs every display of Dole courage, conviction, and admirable humanness to his disadvantage. I agree that he needs to suit up and try to transcend the national news organizations as best he can; but this requires discipline and careful selectivity, not letting it all hang out. Second, Dole being Dole means talking and acting like a legislative leader–what he has done for most of his adult life and what he does better than practically anyone else. But Americans have never elected a legislative leader directly to the White House. Legislative leaders are highly partisan and forever immersed in legislative arcania and nose counting; their specialty is fashioning opportunistic, unprincipled compromises that leave everyone a little grouchy. All worthy political arts–essential for holding a heterogeneous democracy together–but nearly the opposite of the broad and principled leadership we seek in a chief executive and head of state (most of the men we have elected president have already been CEOs–governors or generals). So Dole must not only be Dole, but–what is much more difficult–must promptly become a rather different Dole then he has been throughout his public life in his approach to the day-to-day onslaught of political controversy. Herb Stein asks a) whether Mr. Dole can be natural and true to his convictions while advocating a policy agenda at variance with his political roots, and b) why I downplay the pro-growth argument for the flat tax. I suppose Bob Bartley is living proof that a Midwestern farm boy can become a committed supply-sider. My own answer to both questions is that Mr. Dole can indeed advocate something as radical as the flat tax with honesty and conviction, provided he does so for reasons he is convinced are right–and that he, like most of the voters he must appeal to, is much more likely to “relate to” the arguments I have advanced (fairness, simplicity, depoliticization of the economy) than to the growth-effects arguments of an important but by no means uncontested detachment of economists. For the same reason, I think Mr. Dole would be more likely to embrace with conviction my “strong” flat tax proposal than the 15 percent tax cut advocated by his advisers (which Bartley and I both oppose). The tax cut, while a more modest and conventional idea, would be entirely dependent for its political force on the general acceptance of supply-side economic growth arguments; if these arguments were regarded as merely disputed, which they surely would be, the tax proposal would play beautifully into the hands of President Clinton, who would claim that Republicans were jeopardizing his historic, hard-won achievements in reducing the federal deficit. But I have deeper reasons than these (or than my personal policy preferences) for recommending a Dole Flat Tax–advocated on the grounds I have described, and explicitly reserving judgment on the exact rate of taxation and exact effects upon economic growth–as the centerpiece of the Dole presidential campaign. The Dole campaign is in very serious trouble, and requires for its revival something beyond conventional political strategizing; it requires a bold apercu, an insight into something afoot in American society that is not generally recognized, to take the opposition by surprise and catapult it ahead. That Americans are intensely concerned over crime and drugs and lousy schools is hardly unrecognized; that the antigovernment animus of the 1994 elections still runs strong is well understood by President Clinton if not by the Republicans and the media. My apercu is that popular notions of economic fairness are today sharply at variance with those of the political and professional elites of both parties. I think the simple proportionate tax described in my previous submission, replacing altogether the current, sadistically complex tax system with its thousands of exemptions, subsidies, and redistributions, would be easy to explain and understand and would be enormously popular. And I think that the arguments Democrats and the media would reflexively advance against it (shorn as it would be of contestable arguments about economic growth) would, to their amazement, fall flat or backfire. It is true, as Herb Stein says, that budgeting requires some assumption about future growth; but a presidential campaign is not a budget or a bill. Mr. Dole should say no more at this point than the tax rate should be future federal spending divided by taxpayers in proportion to their incomes (perhaps minus their savings–one of many wrinkles I omit here), and that he will wrestle day and night with the Congress to keep spending to the lowest level possible consistent with important federal responsibilities. That would put the argument back to the level of generality appropriate to a presidential campaign, and back to the issues of fairness, simplicity, and the abolition of political “gifts” to taxpayers of their own money. (I don’t imagine that voters would be indifferent to the likely effects on their individual taxes–anything but; rather I think it would be easy to grasp that almost everyone would end up being better off.) It would be Dole being the Dole of his fabled no-nonsense upbringing, distilling the essence of what he had learned observing the Washington legislative factory at close range for 35 years. Frank Keating

11:37 a.m.  Tuesday  7/30/96

On the issue of tax policy, there has to be an overglow to the Dole economic agenda and that overglow should be growth. The policies of a Dole administration should be growth-focused, opportunity-focused and tomorrow-focused. They should speak to the next generation of Americans who are concerned that we need to keep up, to save and to compete with their contemporaries in Europe and Asia. So, to pursue an across-the-board marginal tax cut and to pursue a repeal of the Bush, Clinton tax increases that discouraged growth, savings and investment is a wise policy. We should without apology advance a cut in the capital gains tax as an opportunity for increased investment and savings to permit people to get out of investment in non-producing assets to investment in producing assets. We need to get away from this notion that there is just one size pie and we argue over who gets what share of that pie. We all should be viewing it as an expanding pie and an opportunity pie. His growth policy should be very simple, not something only a CPA can understand. A 10 or 15 percent across the board tax cut and a cut in the capital gains tax makes sense if it is delivered to the voters in a clear message. Going after the Bush and Clinton tax hikes won’t work if the debate is focused on opening and closing certain small loopholes. The politically smart thing to do in the tax arena is to center on simplicity. Mary Matalin

12:38 p.m.  Tuesday  7/30/96

Our “discussion” led off on to style as much as policy because, obviously, politics has become a style game in our mass-communication age. Where technological advances in communication originally served to democratize the political process–i.e., FDR and radio–subsequent advances–television to be exact–have decimated democratic dialogue. Seven second soundbites dominate. Vacuous “reporting” prevails. Only 15 percent of the primary coverage was substantive, while 49 percent of the candidates’ speeches, ads and statements were on policy. This disconnect with the voters (not to mention reality) is the driving force (the invisible hand) underlying the success of a resurgent radio culture and indeed cybersurfers searching for the message, the meaning, the meat of issues. The messenger has become the message in traditional media formats, which gives a decided advantage to President Clinton, both a product and master of the TV age. Clearly the winning policies are common-sense conservative ones, as evidenced by the much maligned polls and Clinton’s rightward ricochet. Nothing would provide for a better campaign, not to mention country, if we could have a BIG debate on tax policy. Our ridiculously archaic and cumbersome tax code, used by both the right and left as a tool for social engineering, should be the centerpiece of the 1996 campaign. Witness the Forbes phenomenon. Despite the full-throttle, full-throated mass attacks on the flat tax, not only did Forbes fool the pundits, but has ensured tax reform will be discussed. The Republican Congress has done a good, albeit uncommunicated, deal of solid work on various reform proposals, particularly consumption and flat tax proposals. What they have failed to do is lead with this compelling issue. Forbes proved it’s not too complicated for the average voter to comprehend. The Congress and conservatives have also failed to articulate the merit of a capital gains reduction. The conservatives’ and growth advocates’ spineless acquiescence to democratic class warfare demagoguery on these (as well as Medicare and starving kids) issues is as much a factor in Dole’s shaky showing now as anything his own campaign has or has not done. The pathetic silence and subservience to liberal prevarication predates the 104th Congress. Rolling over on Reaganomics made the Engler and Whitman record even more miraculous. That Michigan and New Jersey have budget surpluses after slashing taxes should not only vindicate supply siders but provide some spine for 1996 candidates at all levels. That democrats are scared witless by the possibility Dole may fly the tax cutting banner is manifest in their repeated howls of Dole’s record of “fiscal responsibility” (read spending reduction before tax cuts) even before he unveils his economic plan. Dole can, should, must run on the tax reform and tax cuts and explain his Congressional record as the necessity of majority/minority leader consensus building. He said he’d be Reagan if that’s what the Party wanted. The Party wants and country needs a return to Reaganomics. Herb Stein

2:20 p.m.  Tuesday  7/30/96

We’ve had a lot of talk about taxes, in which we all share an interest. I don’t want to stop the panelists from saying more about that if they are inclined to do so, but I would like to try to divert them a little bit. On the subject of taxes I refer our readers, as well as the panelists, to the discussion of ” Can Cutting Taxes Speed up Growth?” conducted in Slate magazine the week of July 1. Four well-qualified economists (which I don’t think is an oxymoron) participated. The choice of a running mate is one of the fascinating subjects about Mr. Dole’s campaign. Does the panel think that is important–for the election and subsequently? Of course, any member of our panel would make a suitable vice-presidential candidate. But if we exclude them from consideration, do the panelists have any names to propose or any important qualifications to suggest? The Presidency is a team, not just one man, and the composition of the team is important. In the ordinary course of events the identity of some of the other members–the secretaries of State and Treasury, the chief of staff and the national security adviser–is more important than the identity of the vice president. Can a candidate give assurance of the quality of his administration by identifying some of the men and women who would be with him? Related to that, and to the question of reconciling the candidate’s demonstration of his personal qualities with evidence of mastery of policy issues, is whether the candidate should issue a series of position papers on major issues. They would not have to be in his name but could be in the names of people of some stature–Dick Cheney, Jeane Kirkpatrick (I run out of names fairly quickly). Some candidates have done that or something like it in the past. Although we have had much talk about taxes in this program there has been relatively little about the deficit, and some of that has been rather dismissive. But Mr. Dole has made a big point about the balanced-budget amendment and public opinion polls suggest more public support for that than for any other policy proposal. Do you think he should soft-pedal that? One point that has not come up in this discussion, or in the campaign so far, to my knowledge, is the economic and fiscal situation the nation will face when the baby-boomers start to retire, in about 15 years. Should the candidate call attention to that, and to its possible policy implications, or should he let it lie? DeMuth’s suggestion about Social Security has something to do with that issue, but not with the largest part of it, which is Medicare. In his Monday submission, Bob Bartley said, “The winning recipe for Republicans is to defend the Reagan record (against the editor of Slate and even, if it proves necessary, the moderator of this exchange).” Let me assure him that he won’t have to defend it against me, at least not in this venue. The moderator’s function, as I understand it, is not to contest with the panelists but to keep them civil–and you have all been well-behaved, so far–and to keep them addressing the relevant questions. But I don’t think the Reagan record is the relevant question. Whatever you may think of the Reagan record, the next president cannot repeat it. He cannot say to the Soviets, “Tear down this wall!” The next president will start with a new situation. He will start with a maximum tax rate of 39.6 percent, not 70 percent, as Reagan did. He will start with a federal debt equal to 50 percent of the Gross Domestic Product, not less than 30 percent as Reagan did. Perhaps most important, at his inauguration the next President will be 14 years from the start of the retirement of the baby boomers, with all the economic and fiscal implications that has, not 30 years away, as Reagan was. The times they are a-changing, or as Heraclitus said, “You can’t step in the same river twice.”