CLINTON & TAXES: Fact Sheet - 10/15/92 October 15, 1992 WE CAN'T TURN THE WHITE HOUSE INTO THE WAFFLE HOUSE: The parade of Bill Clinton's deceptions and distortions continued tonight -- only the location and format changed. A sample: $150 Billion Tax Increase Tonight Clinton again charged that his economic plan does not raise taxes by $150 billion. What Clinton won't tell the American people is that: o On page 22 of Clinton's own plan, he lists the tax increases he would impose, and how much revenue he would expect to raise. These items total $150 billion. o Nowhere in the budget tables -- in his own plan -- does Clinton list his own tax cut, or how much revenue it would save. o It is also dishonest for Clinton to suggest that one can net out taxes with other budget proposals and thus end up with less net taxes. Tax Increases Tonight Clinton charged that the President has vetoed urban enterprise zones and investment tax credits because they would make the "wealthiest Americans pay more." FACT: This March President Bush vetoed a $100 billion tax increase that would have hit hundreds of thousands of small businesses and their employees -- not just the wealthiest Americans as Clinton's demagoguery suggests. o Voters shouldn't be fooled about the way Clinton described the urban aid bill. It is a tax bill pure and simple. The enterprise zone proposal, the centerpiece of this bill limits the number of enterprise zones to 50, accounts for just over $2.5 billion in a $27 billion. o Clinton endorsed this tax hike, just as he proposed and enacted the largest tax increase in Arkansas history last year, and this year proposed what would be the largest tax hike in American history. o The same bill included a repeal of the luxury tax on boats and airplanes. This tax had been imposed by the Democratic leadership to "soak the rich" but it did little more than cost about 20,000 middle-income Americans their jobs. Reducing the Deficit Tonight Clinton said, "We have to both bring down the deficit and get the economy growing through these kinds of investments." What Clinton won't tell the American people is: o Clinton has promised to spend at least $219 billion more over four years plus another $200 billion on play-or-pay health insurance Clinton's deficit will be at least $200 billion higher than he claims. o Clinton "cooks the books" in his budget plan, relying on outrageously optimistic growth assumptions with which no serious economist agrees. Most of Clinton's phony deficit reduction comes from this dishonest device. o Clinton has proposed virtually no specific spending cuts except for the elimination of one federal program and a dangerously-deep slashing of defense. -- As National Journal reporter Jonathan Rauch wrote recently: "Every President has tried to reduce government costs as an alternative to reducing government benefits. `Maybe those efforts paid for themselves,' says [Congressional Budget Office head Rudolph] Penner, `but only just barely.'" (The New Republic, 9/28/92) o As Governor of Arkansas, Clinton has virtually doubled state spending, and to get around his state's Balanced Budget law, has doubled the State's debt. Crime Rate Tonight, Clinton cited the declining crime rate in Houston, Texas: What Clinton didn't tell the American people is: o Much of the decrease in crime has been due to a community service program funded under the Bush Administration's Innovative Neighborhood-Oriented Policing Program. -- Six months after completing the federally-assisted operation in Houston's Link Valley, calls for police service were down 44% and murder, rape robbery, burglary, theft, arson were down in every surrounding neighborhood by as much as 12%. Police Protection Tonight, Clinton said the government should spend more on police. What Clinton didn't tell the American people is: o Clinton's Arkansas ranks 49th in per capita expenditures for police protection and 50th in total state and local spending on the justice system. Arkansas ranks 46th in per capita corrections spending. Arkansas ranks 49th in the nation in total law enforcement spending. o Since George Bush took office, the federal government has demonstrated a more real commitment to fighting crime in Arkansas. Federal aid to the state police department has increased by 48% in constant dollars. -- Since 1983, when Clinton regained office, state funding has increased only 12.9 percent in constant dollars. Gun Control Tonight Clinton said that he supported the Brady Bill. What Clinton won't tell the American people is that he has waffled on gun control: o In 1990, Clinton said that "I'm not for gun control." (Arkansas Gazette, 11/2/90) o And, in Arkansas Clinton has said, "I am against any legislation or regulation on gun control that goes beyond current law, and am in support of the NRA position on gun control. I am opposed to any additional requirements for registration of handguns or rifles beyond current law" (letter to the NRA, 10/11/82). Education Loans Tonight Clinton said his college loans program would cost just $8 billion. FACT: According to Senator Paul Tsongas, Clinton's plan would easily reach $18 billion. (USA Today, 4/24/92) o What Clinton won't tell the American people about his loan plan is that it would limit scholarships to $5,000 a year, and cap salaries that participants could get after college at $9,000 a year. (USA Today, 4/24/92) Bipartisan Health Commission Tonight Clinton charged that a bipartisan panel concluded that the President's health care plan would not work. FACT: The study to which Clinton refers was commissioned by Families USA and performed by Lewin/ICF. The "bipartisanship" of the panel is disputable. The president of Lewin/ICF gave $1,000 to the Clinton campaign in December 1991. The media director of Families USA, Arnold Bennett, is a health care advisor to the Clinton campaign. o In evaluating the Clinton and Bush plans, the Families USA commission stipulated that they did not have enough details about the Clinton plan, and thus, just assumed that Clinton would attain the cost savings he argues that he would. This is a ridiculous assumption on which no serious study can be based. Thus, the commission's conclusions are thoroughly unreasonable. Appointing Women o Clinton has appointed few women to high office in Arkansas. Only 17 percent of Clinton's cabinet is made up of women, well below the national average of 23.3 percent. Clinton ranks only 32nd out of the 43 governors for appointing women to cabinet positions (National Women's Political Caucus, 1992 report). Legal Reform Tonight, Clinton said he supported efforts to reduce defensive medicine. What Clinton didn't tell the American people is that: o Trial lawyers give rave reviews to Clinton's record of opposing tort reforms -- including medical malpractice reforms. As the former head of the American Trial Lawyers Association wrote to fellow lawyers (in soliciting contributions for Clinton): "I happen to know that Bill Clinton is against tort reform of any kind." (Letter by Robert Habush, quoted in Wall Street Journal, 4/10/92) Or consider the opinion of someone who knows, and appreciates, Clinton best, the President of the Arkansas Trial Lawyers Association: "I can never remember an occasion when he failed to do the right thing where we trial lawyers were concerned." (Letter by David H. Williams, 7/10/92) o Trial Lawyers are Clinton's Top Source of Contributions: Trial lawyers are working hard to raise money for Clinton, confident that under Clinton tort reforms like the President's will not be enacted. -- Writing to fellow lawyers on Clinton's behalf, the head of the Arkansas Trial Lawyers Association said, "So, can I recommend that your folks put their money behind Bill Clinton for President? Not just yes, but hell yes ... So dig down deep and give to Bill Clinton." (Letter by David H. Williams, 7/10/92) Wages Tonight, Clinton again charged that the U.S. has gone from first to thirteenth in wages worldwide. FACT: o Clinton's use of the term "wages" refers only to manufacturing and production workers -- that's only 14% of the U.S. private sector workforce. o The U.S. ranks first in the world in compensation per employee -- and it has ranked first every year since 1985. (OECD) o The Bureau of Labor Statistics -- the source of Clinton's statistics -- specifically warns that their statistics "do not indicate relative living standards of workers or the purchasing power of their income." (U.S. Department of Labor, June 1992) o Clinton's claim relies on current market exchange rates, which are subject to wide fluctuations, rather than purchasing power. Clinton's measure assumes that U.S. workers spend 100% of their income on foreign goods. Obviously, they do not! Job Creation Clinton again charged that there have been no new jobs under President Bush. FACT: o Since 1988, 1.5 million private sector jobs have been created. (Bureau of Labor Statistics) o Private sector jobs went up 31,000 last month alone on a seasonally-adjusted basis. The number of employed Americans has increased by over 970,000 since December. (Bureau of Labor Statistics, Employment Reports) o Total employment has risen over 2 million since President Bush took office. Working Harder Clinton again charged that Americans are working harder and earning less. FACT: Americans are working less hours per week than they were 10 years ago. From 1982 to 1992, average weekly hours worked by private, non-agricultural employees actually declined. (Economic Report of the President, Table B-42) -- Total hourly compensation for all business employees (adjusted for inflation) grew 3% under Reagan-Bush -- after having fallen 1.3% under Carter. Hourly compensation has also increased in the last year. (Bureau of Labor Statistics) o Wages in Arkansas, like income, remained comparatively flat under Clinton: -- In 1980, average hourly earnings in Arkansas manufacturing were only 78.5% of the national average. Ten years later, after eight years of Clinton's vaunted job creation, manufacturing wages were unchanged. -- In 1989, Arkansas' average hourly earnings for production workers in manufacturing ranked next to last in the nation -- and down from a 47th place ranking in 1980, i.e. before Clinton, (1991 Statistical Abstract of the United States, Table 1304). Russia's Demilitarizing Tonight, Clinton claimed that Russia was "demilitarizing." FACT: Clinton's claim that Russia is "demilitarizing" is the mistake of a foreign policy novice. The United States has signed nuclear arms reduction, and conventional arms reduction, treaties. It is a gross exaggeration, however, that the former Soviet Union is demilitarizing. o Within the former Soviet Union, there are between 30,000 and 40,000 warheads; there are approximately 3 million soldiers still under arms in the Former Soviet Union. o The Former Soviet Union has agreed with the U.S. to reduce the major portion of its nuclear arms. It has made plans to reduce its armed forces. However, the plans have not yet implemented. And should the political situation in the former Soviet Union change, armed forces there could still pose a serious military threat to Europe and the United States. Ending Nuclear Warheads in Successor States Tonight, Clinton said he wanted continued to push for reductions of nuclear arms in successor states to the former Soviet republics. o When President Bush was trying to persuade the new governments of successor states to former Soviet republics to adhere to nuclear weapons treaties, Clinton said the U.S. should only ask these countries to "demonstrate responsibility with regard to nuclear weapons." (Speech at Georgetown University, 12/12/91) o Instead of joining this fight to stop the loss of central control over thousands of nuclear weapons, Clinton weakly abstained. Spending Cuts Tonight, Clinton claimed that his budget plan included $140 billion in spending cuts. What Clinton won't tell the American people is: o His spending cut numbers do not add up. Of the alleged $145 billion in spending cuts, $57.5 billion (or 40%) are administrative gimmicks and unspecified measures, and $61.3 billion (or 42%) are additional and irresponsible cuts in America's national security programs. In short, at most 18% of the cuts proposed by Clinton could even remotely be termed "real." o Of the $145 billion in spending cuts, Clinton would only terminate one federal program -- the honey bee program -- which Senator Gore has voted for on four occasions. This stands in sharp contrast to the President who proposed in his FY93 Budget to eliminate 246 federal programs, saving an estimated $5 billion. o In an obvious "me-too" of the President, Clinton calls for a line-item veto, but estimates that he would get just $10 billion in savings over four years. Unfortunately, it is the Democratic Congress that has refused time and again to give the President line-item veto authority. What are they waiting for? Were Clinton truly serious about a line-item veto, he would write the Democratic leaders tomorrow and urge its passage. If a line-item veto were passed this year, with a stroke of the pen President Bush would save more than $10 billion this year alone. Defense Spending Tonight, Clinton said he thought his defense cuts were prudent. What Clinton won't tell the American people is: o He will cut defense outlays by $58.5 billion more than the President over the next five years -- cuts that are more than three times the size of the President's. o Clinton's overly-deep defense cuts will cost 1 million more jobs in the armed forces and in defence-related industries. o Clinton's defense cuts are deeper than those proposed by even the Democratic chairman of the House Armed Services Committee, Les Aspin. Thus, the armed forces under Clinton will be dramatically smaller than they are at present. The U.S. will have a dramatically-reduced ability to project force around the world using aircraft carriers. o While talking about the need to slash defense spending, Clinton has endorsed a number of high-cost items, such as the Trident submarine, which the U.S. does not need. o If Clinton keeps his pork-barrel promises and slashes overall defense spending, there will be far less money available to maintain the readiness of our armed forces -- impairing our ability to respond to another Saddam, or to deploy rapidly in response to another Noriega. Education Spending -- International Comparisons Tonight Clinton said the U.S. did not spend the most per pupil on education. o Below university level, the U.S. spends more public money per pupil on education than either Germany or Japan. Primary School Secondary School U.S. 3,566 4,370 Japan 2,550 2,325 Germany 2,101 2,659 (Source: OECD Education at a Glance, Table P6, Page 57) Arkansas Job Facts Clinton claims "Arkansas now leads the nation in job growth." o Six states had higher job growth than Arkansas from August 1991 to August 1992. o From 1980-1989 arkansas ranked 26th for job growth (State and Metropolitan Area Data Book, 1991) o Arkansas ranked 37/51 for its unemployment rate in 1980 -- at the height of the Carter recession. It ranked 49/51 in 1989 at the height of the Reagan-Bush recovery. (State and Metropolitan Area Data Book, 1991) Tonight Clinton said Arkansas ranked fourth in the Nation in manufacturing job growth. What Clinton won't tell the American people about his own record in Arkansas is: o In 1990, Arkansas's average hourly manufacturing earnings ranked 15th of 16 Southern states, ahead only of Mississippi. Arkansas manufacturing earnings for durable goods ranked dead last -- almost 30 cents an hour behind Mississippi. o In 1980, the second year of Clinton's first term as governor, Arkansas's average hourly manufacturing earnings were only 78.5 percent of the national average. Ten years later, that figure was completely unchanged ("Average Hourly Earnings in Arkansas Manufacturing," Regional Economic Analysis, University of Arkansas, May 1991). Tonight Clinton claimed that Arkansas was 4th in the Nation in income growth. What Clinton won't tell the American people about his own record in Arkansas is: o Personal income grew less under Bill Clinton than it did under any other Arkansas governor in the past 25 years. (Bureau of Economic Analysis, U.S. Department of Commerce) o A large percentage of last year's income growth in Arkansas (which is where Clinton gets his "4th best ranking") came from pay raises Clinton gave to state government employees. o Personal income: During the Clinton Decade, Arkansas' personal income growth rate was 11 percent lower than the national average. And, despite Clinton's being in office for eight years during the 1980s, Arkansas' personal income growth rate was 48% lower than its growth in the 1970s, (1991 State and Metropolitan Data Book). o Disposable Personal Income: During the Clinton Decade, Arkansas' disposable personal income growth rate was 14 percent lower than the national average. And, despite Clinton's being in office for eight years during the 1980s, Arkansas' disposable personal income growth rate was 61% lower than its growth rate in the 1970s, (1991 State and Metropolitan Data Book). o If Clinton had run the United States the way he has run Arkansas, the average family would live on $21,046 per year. Under President Bush they live on $28,525. (Washington Times, 7/26/92) -- Per capita personal income would be $9,931. Under President Bush it is $13,546. (Bureau of the Census, Summary Tape File 3A) Arkansas poverty Tonight Clinton claimed that Arkansas ranked 4th in the Nation in poverty reduction. o Arkansas did rank 4th best in poverty reduction over the last year, but it ranked 23rd out of 51 for poverty reduction from 1979-1989. (State and Metropolitan Area Data Book) o Before Clinton, however, Arkansas did even better, ranking fourth for an entire decade (as opposed to Clinton's one year) -- from 1969 to 1979. Clinton's Nobelists o Over 100 economists have concluded that Clinton's economic plan would entail higher taxes and fewer jobs, larger deficits and renewed inflation. o Here's what some other economic authorities have said about Clinton's plan. -- Martin Feldstein: "My rough calculations suggest that the Clinton plan would actually raise the 1996 deficit by $26 billion even without any extra health care spending ... Proposing to tax foreigners may be good politics, but the Clinton numbers are implausible as budget policy." (Wall Street Journal, July 3, 1992) -- Robert J. Samuelson: "What we have here is a man who hasn't made choices. There's a pitch for everyone. The megapitch is that "investments" will soon speed up growth. They won't." (Washington Post, July 1, 1992) -- Rep. Leon Panetta: "The tough choices are still there ... [Clinton] doesn't frankly confront the issue of how we reduce the budget deficit ... I don't see how he can ... pump all that into added spending." (Washington Post, July 19, 1992) o Four of Clinton's Nobelists have expressly advocated tax increases: Kenneth Arrow, Lawrence Klein, Paul Samuelson, and Franco Modigliani. (New York Times, 11/28/82; US News and World Report, 1/3/83; Chicago Tribune, 10/17/85) # # #