Restoring the American Dream: Bob Dole's
Pro-Growth Plan for
America today is competing in the most dynamic
world economy we have ever seen. Scores of countries populated by hundreds of
millions of people are discarding central planning in favor of free enterprise.
New markets are opening to American goods and services. Entrepreneurs are
developing new technologies to create products we could have only dimly imagined
just a decade ago. America stands on the threshold of a breathtaking future,
with greater opportunities for economic growth and prosperity than at any time
during our nation's history.
Yet, rather than seizing these opportunities,
the Clinton Administration has taken a "grow slow" approach to
American economic policy. Clinton Administration officials have apparently
concluded that the current average annual growth rate of 2.4% represents the
outer limit of America's economic potential. The American people have paid a
high price for the Clinton Administration's neglect: growth is anemic; incomes
and wages are stagnant; and workers understandably feel more and more anxious
about the future.
In order to create rising incomes for all
Americans, we must commit ourselves to a far more ambitious endeavor. Growth
must be the central goal of U.S. economic policy. Economic growth--and
the rising living standards and prosperity it creates for all Americans--should
be the standard by which all economic policies are judged. America can do better
if we set ambitious, but reachable, growth goals for our country and then
implement the policies necessary to achieve them.
Bob Dole believes the economy can grow at an
annual rate of 3.5%. And he will implement a plan to achieve this goal.
The Clinton Record
Bill Clinton likes to claim we have the
strongest economy in a generation. But economic growth has been anemic; and, if
you accept the Clinton Administration's own projections, the economy will
struggle along at 2.3% growth into the next century. (Source: Dr.
J. Stiglitz, White House Press Briefing, July 18, 1996). Wages and
incomes for working Americans are stagnant. Families are being squeezed by
rising taxes. Businesses are choking on government regulation.
This is the fundamental reality of the
Clinton economy--high taxes and stagnant wages. This is the key to
middle-class anxiety. It is why people feel they are working harder, but falling
further behind; why they believe the current generation won't be as successful
as the last generation; why they believe their children will be worse off; why
they feel so anxious about their economic future.
The Clinton Administration has accepted the
notion that paltry growth is the best we can achieve. Under Bill Clinton, we
have entered a new era of diminished expectations--an era when we are told that
we can't even match the progress of the past, much less compete with the most
dynamic economies in the world.
The central thesis of the Dole growth agenda
is that America can do better. The story of America has been written by those
who have set and achieved ambitious goals, not those who impose artificial
limits on accomplishment.
The truth is, anemic rates of growth and stagnant wages are only inevitable if we continue to follow Bill Clinton's economic prescription of higher taxes, a refusal to balance the budget, and the over-regulation of the economy. The total tax burden is the highest in U.S. history. Federal, state, and local taxes consumed a record 31.3% of GDP last year. At the end of World War II, taxes consumed only 25% of GDP. The federal tax burden alone rose from 19.2% of GDP in 1992 to 20.5% today. (Source: National Center for Policy Analysis). The average middle-income family spends more of its budget to pay taxes than it does on food, clothing, and shelter combined. (Source: Joint Economic Committee)
By any historical measure of economic growth,
America's economy is lagging. Economic growth under Bill Clinton has averaged
2.4% per year. That's slower than when he was elected in 1992 (3.7%); slower
than the entire decade of the 1980s (3.2%); slower than the last five expansions
(4.4%); and slower than what we've averaged over our entire post-World War II
history (3.3%). (Source: Joint Economic Committee)
Productivity growth--the source of rising
incomes--has been cut in half during the Clinton Presidency, falling from 1.2%
per year from 1980 to 1992 to only 0.6% from 1993 to 1995. (Source:
1996 Economic Report of the President and the U.S. Department of Labor). The
hard reality of slow productivity growth is stagnant wages and incomes that are
squeezing working Americans. The average real pay--wages, salaries, and fringe
benefits--of working Americans has stagnated under Bill Clinton. This is the
first period of expansion in U.S. history when workers' pay has not risen.
One of the central goals of Bob Dole's
Presidency will be to stimulate greater economic growth. The goal is not
just to restore America to its pre-Clinton rates of economic growth, but to
achieve an even more ambitious growth path of 3.5% or higher, with price
In sum, the six key points of Bob Dole's
Pro-Growth Plan for America's Families are:
1. A Balanced Budget Amendment to the U.S.
Constitution, to ensure that the budget stays balanced after 2002 and
throughout the next century
2. A balanced budget by the year 2002
3. Tax relief and fundamental tax reform
4. "Ending the IRS as we know it"
5. Education and Job Training Reform
6. Regulatory and Lawsuit Reform
1. A BALANCED BUDGET AMENDMENT
One of the first priorities of a Dole
Administration will be to secure Congressional passage and ratification of the
Balanced Budget Amendment to the U.S. Constitution. Only the moral authority of
the Constitution can force Washington to do what every American family must do:
live within its means. Most states are required to balance their books. Bob Dole
believes the federal government should be required to do so as well.
Only one man stands between the Balanced Budget
Amendment and the American people--Bill Clinton. He has fought every effort to
pass the Balanced Budget Amendment. Since Bill Clinton first took office, the
Amendment has come up for a Congressional vote three times. Each time, he has
led an all-out effort to defeat the Amendment. Six members of the President's
own party, who had previously supported the Balanced Budget Amendment, switched
their votes...thanks to Bill Clinton's efforts.
2. BALANCING THE BUDGET BY THE YEAR 2002
Balancing the federal budget is essential to
increasing economic growth. In 1995, the federal government paid over $230
billion in interest on the national debt, or over 15% of all federal spending.
Nearly 40 cents of every dollar the federal government collects in income taxes
goes to pay interest on the national debt. (Source: The Economic
and Budget Outlook: Fiscal Years 1997-2006, Congressional Budget Office, May
The federal deficit drives up interest rates and hits families. It is a "stealth tax" that every family with a home, every father and mother with a child in college, every young person who buys a car, must pay. Balancing the federal budget would cut interest rates by nearly 2%, and save the typical family:
We simply cannot continue to mortgage America's
future. If we continue current tax and spending policies, future generations
will be saddled with an effective tax rate of over 80%. (Source:
The Economic and Budget Outlook: Fiscal Years 1997-2006, Congressional Budget
Office, May 1996).
Bob Dole's economic program will balance the
budget by the year 2002. The following table illustrates how we will achieve
THE DOLE-KEMP PLAN:
A BALANCED BUDGET AND TAX RELIEF
Dole-Kemp Tax Plan
Tax relief already included in Congressional Balanced Budget Plan
Updating the CBO Baseline
Federal Spending Control*
FCC Spectrum Auction
Additional Savings and Reform Measures*
TOTAL FEDERAL DEFICIT IN 2002
*Does not include any reduction in Social
Security, Medicare or Defense
3. TAX RELIEF AND FUNDAMENTAL TAX REFORM
There are two main problems with our current tax
system. The American people are over-taxed. And our tax system is too
burdensome, too complex, and too anti-growth. Bob Dole's Pro-Growth Plan For
America's Families will address these two problems by:
First, providing immediate tax relief for every
American taxpayer. The Dole tax relief plan contains the following provisions:
The estimated effects on revenues over six years are as follows:
1997-2002 Total (Billions of Dollars)
Reduction in personal income tax rates
Capital gains tax relief
Child tax credit
IRA expansion, education, training, and other incentives
Repeal 1993 tax hike on Social Security benefits
Tax relief for every American taxpayer is step
one. But a Dole Administration will not stop there. America's tax code
discourages work, saving, and investment, encourages tax avoidance, and reduces
the rewards for entrepreneurship--the true engine of economic growth. The
complexity of our tax system wastes billions of hours in compliance and effort
and--worst of all--convinces many Americans that the tax system has been
hijacked by lawyers, accountants, and special interests, which it has.
The Clinton Administration is content with the status
quo and has no intention of seriously reforming the current tax system.
Treasury Secretary Robert Rubin recently told the Wall Street Journal:
"There's nothing in the public domain we have found that's better than what
we have." (6/7/96) Obviously, a second Clinton term promises no relief for
taxpayers and no simplification of the tax code.
Senator Dole believes that restoring America to
its full economic potential requires a fundamental overhaul of the tax system.
He will repeal the current tax code and replace it with a new system that:
This new tax system, which is lower, flatter,
fairer, simpler and more savings-oriented, will provide immediate tax relief to
every taxpayer and stimulate economic growth now.
4. ENDING THE IRS AS WE KNOW IT
As the tax code has grown more complex and
loophole-ridden, the Internal Revenue Service has grown more aggressive and more
burdensome. The IRS today has more enforcement agents than the EPA, OSHA, FDA,
and the Drug Enforcement Agency combined. (Source: Stephen Moore
et al, "Ax the Tax," National Review,
April 17, 1995). It is twice as big as the CIA and five times the size
of the FBI. (Source: Report of the National Commission on
Economic Growth and Tax Reform). The instruction booklet for the EZ form
is 31 pages long. Taxpayers spend $190 billion and 6 billion man-hours each year
to comply with the tax code. (Source: Joint Economic Committee)
It is simply wrong to have a tax system that is so complicated that 58 million taxpayers, 50% of all taxpayers who file, hire professional tax preparers to do their own returns. (Source: Joint Committee on Taxation)
Comprehensive tax reform--with dramatic
simplification and a postcard return for most filers--is clearly the most
effective way to end the abusive power of the IRS. There are other reforms which
could be taken as well. A combination of the following reforms would allow us
to cut the number of IRS bureaucrats by 30% by 1999.
5. EDUCATION AND JOB TRAINING REFORM
As we enter a new century, it is obvious that
the opportunities of tomorrow will be created in America's classrooms and
science labs. Education is the single greatest force for improving opportunity
from one generation to the next. The value of education, training, and other
human capital is no less important than that of machines and other physical
The American people know how to build a
world-class educational system. We built one once before. It rested upon a solid
foundation of parents and teachers who exercised direct control over grade
schools and high schools. It rested upon colleges and universities that are the
envy of the world, but were affordable to all Americans. It rested upon working
men and women who learned new skills and climbed up the economic ladder, for
themselves and their children.
Today, education has instead become a bloated
monument to political influence and the status quo. All too often, our
schools are dangerous and demoralizing places. The price tag of a college
education has risen astronomically in recent decades, beyond the reach of too
many families. Employers are discouraged by the tax system from providing
education and job training assistance to their employees. A maze of federal job
training programs, designed with the best of intentions to give more Americans a
first or second chance, does not teach workers the skills they need for the
Bob Dole will help increase long-term economic
growth and opportunity by encouraging choice, quality, and access to education
and training--for grade school and high school kids, for students in college and
other post-secondary institutions, for working Americans, and for those laid off
or unemployed. Bob Dole will:
6. REGULATORY AND LAWSUIT REFORM
Washington rules, Washington regulations, and Washington red tape are strangling the American economy and lowering its economic growth rate. An estimated $1.3 trillion of economic activity is lost each year due to government regulations. (Source: Center for the Study of American Business). That means fewer new jobs and less take-home pay for America's families.
President Clinton's own Administration has estimated that the cost of complying with federal regulations was at least $668 billion in 1995, a figure larger than the entire personal income tax for the same year. This is more than $6,000 per household. By the year 2000, these figures are expected to rise to almost $721 billion, or $7,000 per household. In other words, even if no new federal regulations are imposed, the "regulatory tax" on each American family from regulations already on the books will increase by $1,000 over the next four years. (Source: U.S. Small Business Administration)
President Clinton has opposed real regulatory
reform. Just look at the facts: He opposed and threatened to veto the
Comprehensive Regulatory Reform Act of 1995, which would have required
cost-benefit and risk assessment analysis of new federal regulations. He vetoed
regulatory reform in late 1995 as part of legislation to increase the debt
ceiling. His "Reinventing Government" program mainly looked at
internal agency rules, not those rules that burden individuals and private
His Administration has failed to enforce the
Paperwork Reduction Act, which requires federal agencies to set a goal of at
least a 10% reduction of the paperwork burden. A Government Accounting Office
study estimates that the Clinton Administration will achieve at most a 1%
reduction in FY 1996. His Administration even exempted the IRS from the Act by a
ruling of the OMB. In a June 1996 report GAO stated that since 1989, "the
IRS's paperwork burden has accounted for more than three quarters of the
As President, Bob Dole will return sanity and
common sense to federal regulations. He will eliminate the unnecessary rules and
regulations, the red tape and bureaucracy that come out of Washington. He will
free our economy to create more jobs and opportunity for all Americans. Bob Dole
Common-Sense Legal Reform
Bob Dole understands that the American people deserve a legal system that protects the rights of the injured and the pocketbooks of consumers from the greed and influence of trial lawyers.
Abuse of the legal system impedes economic growth and hurts small businesses, limits work opportunities for those seeking jobs, and damages the competitiveness of American companies. The cost to the American people is staggering: by one estimate, lawsuit abuse imposes an effective "litigation tax" of $132 billion per year on the U.S. economy. (Source: Tillinghast, Nelson, & Warren). Lawyers must be made to realize that our nation's legal system is designed to make the injured whole, not to make trial lawyers rich.
The current system encourages lawsuit abuse.
Outrageous punitive damage awards--such as the $2.7 million one person was
originally awarded after spilling McDonald's coffee on herself--encourage the
"go-for-broke" mentality of trial lawyers, and drive up costs for
consumers. The rule of joint and several liability--under which a defendant can
be held responsible for 100% of the damages, even if he or she is only 1% at
fault--gives trial lawyers an incentive to sue everyone in sight.
The trial lawyers, one of the richest and most powerful special interest lobbies in America, have an enormous stake in maintaining the status quo: they rake in an astonishing one-third or more of damages recovered in tort cases, reducing the amount received by injured parties. Consumers are hurt as well: the average American family pays an extra $200 per year in insurance premiums to make up for phony claims. (Source: National Insurance Crime Bureau)
President Clinton is clearly the trial lawyers'
candidate of choice, and for good reason. Mr. Clinton has consistently put trial
lawyers ahead of consumers, workers, and businesses large and small--most
recently by vetoing both product liability and securities litigation reform.
As President, Bob Dole will fight for
common-sense legal reform that promotes job opportunity and economic growth far
into the future--and makes the power of the trial lawyer lobby a thing of the
past. Bob Dole will:
More growth, more opportunity, higher wages,
less government, lower taxes. Bob Dole's Pro-Growth Plan is the right plan
for restoring the American Dream.
Each of Bob Dole's initiatives will help fuel
the economic growth and opportunity that are our birthright as a people. Each of
these initiatives draws on the simple proposition that the American people, not
government, are the true guardians of our freedom and prosperity. This is the
vision that inspired our Founding Fathers when they declared, with proud
courage, that all men "are endowed by their Creator with certain
inalienable Rights, that among these are Life, Liberty, and the pursuit of
Happiness." We must believe in the power of freedom. We must believe in
ourselves. We must once again seize the opportunities before us as America
enters the 21st century.
More opportunities. Smaller government. Stronger and safer families
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