Election won’t matter to economy

WASHINGTON – Despite the stark differences in economic plans from President Bush and Sen. John Kerry, growth and job creation should turn out pretty much the same no matter who takes the White House.

Private economists also say the federal budget deficit, mentioned infrequently during the campaign, will bedevil the winner of the Nov. 2 election.

Experts who have analyzed the spending and tax proposals of both candidates say the plans, if enacted by Congress, would have a similar effect on growth, but the gains would come in different ways.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

“If both candidates were to follow through on everything they have promised, then the economy would be roughly the same four years from now under either plan,” said Mark Zandi, head of Economy.com, a private forecasting company.

Global Insight, an economic consulting firm that has fed the details of the two economic plans into a computer forecasting model, reached the same conclusion.

“The economic impacts of the Bush and Kerry budget plans are so close as to be almost indistinguishable,” said Nariman Behravesh, the firm’s chief economist.

Under the Economy.com analysis, the economy as measured by the gross domestic product will have average growth rates of 3.1 percent over the next 10 years under the Bush plan and 3.2 percent under the Kerry plan.

Global Insight forecasts growth rates of 2.9 percent under both plans.

Zandi projects that Kerry’s plan will create an average of 1.5 million jobs each year over the next decade, compared with 1.3 million for Bush’s.

The Global Insight model puts the figure at 1.4 million, resulting in 146 million jobs by 2014.

All of those forecasts would represent an improvement over the actual experience of the past four years in which the economy, struggling with a recession and then weak job growth, has seen a net job loss of 821,000 since January 2001.

The growth predicted for the plans would come about from different approaches.

Bush’s centerpiece proposal is to make the tax cuts of his first term permanent, at a 10-year cost of nearly $1 trillion. That would increase growth by promoting higher capital spending through a more attractive investment climate.

Kerry’s plan would rely on greater government spending, in part from spending $653 billion to expand health care coverage.

“The Bush plan helps boost the stock market, profits and capital spending while the Kerry plan provides a bigger boost to government spending,” Behravesh said.

The wealthy would not be treated the same under the Bush and Kerry plans.

The Democratic senator from Massachusetts is campaigning on a pledge to roll back the rate cuts for households earning more than $200,000 per year.

Clint Stretch, director of tax policy at Deloitte Tax in Washington, said a family of four earning $40,000 annually, was saving $2,000 under the Bush tax cuts and would continue to see those savings under Kerry’s plan.

Stretch estimated that a family with earnings of $575,000 annually is now saving $19,300 under Bush’s tax cuts, but would lose about 70 percent of that relief and see its tax bill increase by $13,700 under Kerry’s plan.

Private economists see both candidates failing to control the federal deficit.

The Republican incumbent and his challenger are campaigning on a pledge to cut the deficit in half by 2009. Analysts, however, do not see either man coming close to achieving that pledge.

The deficit set a record in dollar terms of $413 billion in the just completed 2004 budget year.

Global Insight forecasts that the deficit would climb to $451 billion in 2009 under Kerry’s programs, while dipping only slightly to $384 billion under Bush.

Looking out five more years, the deficit figures grow even more ominous as the retirement of the baby boomers starts to put severe strains on Social Security and Medicare.

Global Insight projects a 2014 deficit of $633 billion under Kerry’s programs and $570 billion under Bush.

Economic plans

Important elements of the economic plans of President Bush and Democrat John Kerry. All figures are totals for the 10 years ending in 2014 unless otherwise indicated.

KERRY

Initiatives

* Expand health care coverage, $653 billion.

* Education, $207 billion.

* 5 percent corporate tax cut, $120 billion.

* Veterans and military families, $55 billion.

* Temporary jobs stimulus, $47 billion.

* Energy and environment, $35 billion.

Savings

* Repeal Bush tax cuts on people earning more than $200,000 annually, $860 billion.

* Create a commission to recommend ways to reduce federal payments to corporations and enact those proposals, $300 billion.

* Better disease management by companies and other health savings, $300 billion.

* Close loopholes on taxes owed by companies overseas, $120 billion.

* Cut 100,000 federal contractors, $50 billion.

* Cut federal electric bill by 20 percent, $14 billion.

BUSH

Initiatives

* Extend tax cuts enacted in 2001 and 2003, which otherwise expire by 2010, $979 billion.

* Tax cuts and spending increases for health care, economic development, education and jobs, $74 billion.

* Other tax cuts for education, charitable giving, other items, $199 billion.

* Other initiatives for which White House has provided only five-year numbers: Defense and domestic security, $185 billion.

Savings, cost over five years:

* All other domestic programs, excluding automatic benefits such as Social Security, $115 billion.

* Medicaid and other benefit programs, $33 billion.

Associated Press

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Oliver Popa, 7, poses with his book, "Drippey Plants a Garden," on Tuesday, March 25, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds 7-year-old publishes children’s book featuring ‘Drippey’ the bee

Oliver Popa’s first grade teacher said he should publish a longer version of a writing assignment. A year later, his mother — a publisher — helped made it happen.

Don Sharrett talks John Wrice through his trimming technique on Friday, March 14, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Everett barber school offers $5 haircuts — if you’re brave enough

Students get hands-on practice. Willing clients get a sweet deal.

Employees and patrons of the Everett Mall signed a timeline mural that traces the history of the 51-year-old indoor mall that was once considered the premier place to go shopping in the city. Thursday, March 20, 2025 (Aaron Kennedy / The Herald)
Mall mural offers nostalgic trip into the past

Past and present Everett Mall employees joined customers Thursday to view an artistic timeline of the once popular shopping mecca.

An estimated 4,000 people attended the "Hands Off!" rally in downtown Everett. Saturday, April 5, 2025 (Aaron Kennedy / The Herald)
Thousands gather in Everett to say ‘Hands Off!’ to Trump

Elected officials join community members to speak at the Snohomish County campus, one of more than 1,400 protests across the world.

Artist and science communicator Jill Pelto to host 1st art show

New pieces will highlight glaciers, part of the Skykomish and Nooksack watersheds.

Founder and director of New Moon Farm Sanctuary Ellen Felsenthal pets Clara Bow-er, a boer goat that was a part of a larger rescue from Yelm on Thursday, April 3, 2025 in Arlington, Washington. (Olivia Vanni / The Herald)
Arlington sanctuary gives new life to goats

The sanctuary recently rescued nine goats from Yelm and is nursing the animals back to health.

Bill France poses in one of his custom flat caps after asking his wife, Sarah France, to snap a photo.
Victim advocate dies at 83, leaving a lasting legacy

Bill France, who fought Parkinson’s until the end, was known for his tireless work in victim advocacy.

Search to continue Saturday for missing 21-year-old Arlington man

Jonathan Hoang has been missing since Sunday evening. He was last seen wearing a green shirt, khaki pants, and black slip-on shoes, and possibly carrying his iPad.

Ash Roberts, left, and Wryly T McCutchen, right, browse for book at the Everett Public Library on Thursday, April 3, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
‘It’s being killed’: Federal grant termination hits SnoCo libraries

A federal agency terminated a $3.9 million grant Wednesday that funds library and museum programs across Washington.

Lynnwood
11-year-old tried to stab student in Lynnwood school, deputies say

The child is still at large, the sheriff’s office said, but there is no active threat to the students or staff at the school.

Nichole Webber: Drawing up plays for athletes and politics

The communications director for the city of Everett believes leadership is rooted in honesty, integrity and selfless commitment to others.

2025 Emerging Leader Natalie Given (Olivia Vanni / The Herald)
Natalie Given: Building trust and communicating concerns

Everett Police Department’s Public Information Officer builds relationship and better communication.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.