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Economy Looms Large in Election

Editor's note: This article is the eighth in a series on issues in the 2004 presidential campaign.

With the War on Terror ongoing, the economy may slip into second place on the list of issues voters use to base their decisions on Election Day. But the economy still ranks a top topic in this year's presidential election.

Listening to President Bush (search) and John Kerry (search), voters could be excused if they thought the two candidates were talking about different countries when they describe the nation's economic outlook. Bush's picture of an economy well on the road to recovery contrasts with Kerry's depiction of an economy in desperate need of help. Analysts say the candidates' proposals on how to oil the economic engine, though light on details, suggest the two don't see things so drastically differently.

"If you look at it objectively, there's not that much difference. For example, on taxes, Kerry would extend most of the same tax cuts that Bush would extend. ... They both say they want to reduce the deficit by exactly one half," economist Bruce Bartlett told FOXNews.com. "Basically, Kerry would have a bigger government and somewhat higher taxes than you would have under Bush. It's not like either one of them is proposing anything radical or substantially different."

"Bush has a big spending record, but he's not promising that much spending if he's re-elected. But Kerry has a big spending record and he's promising gigantic increases," said Chris Edwards, director of tax policy studies at the CATO Institute (search).

Bartlett, a senior fellow at the National Center for Policy Analysis (search), said it is easier to discern Bush's plans because he has a record to go on.

"I think we can pretty much assume that he's going to do the same things he has done in the past. Therefore, I think there's more of a responsibility for Kerry, as the challenger, to offer more detail," Bartlett said.

On taxes, Kerry says he would provide new tax breaks amounting to $250 billion targeted at the middle class for education, child care and health care. Kerry would extend all of Bush's tax cuts except for those earning over $200,000 a year. Bush, on the other hand, would extend all tax cuts that were enacted into law during his first term and would add additional breaks for businesses.

When it comes to jobs, Kerry regularly attacks the president, saying that the country has lost 1.6 million private sector jobs, the first net job-loss for a president since the Great Depression. Kerry says he would create new jobs by ending tax breaks for companies sending jobs overseas and he would lower the corporate tax rate. He has vowed to promote new energy-efficient technologies, which he says would reduce energy costs and help build new industries. Under Kerry, the federal minimum wage would be boosted from $5.15 to $7.00.

Bush's jobs plan includes increasing worker training by investing $250 million annually to strengthen the role of community colleges in workforce development. He would also allow tax-free accounts for workers to pay for training.

Additionally, Bush would work to lower costs and regulatory burdens on America's companies to encourage job growth, and wants to develop tort reforms that prevent companies from going under when they get sued. He has also pledged to create "Opportunity Zones" to help communities most in need by encouraging private and public investment through tax benefits.

Edwards said all the talk of job creation is really just that. The U.S. president does not have much control over employment because it is not susceptible to the tools at the president's disposal, he said.

"Neither of [the candidates] can really affect the joblessness very much in this country," he said. adding that the unemployment rate is not bad at around 5.4 percent.

On trade, Bush says he wants an "aggressive" policy, and points to Congress' approval of trade promotion authority to give the administration the tools to bargain on a country-by-country basis.

Kerry promises to review all current trade agreements and to make sure new free-trade agreements have enforceable labor and environmental standards.

Edwards found little fault with the senator's stance.

"Kerry's record is not too bad on international trade. From our point of view, he promises things like more environmental protection, which is probably no big deal," he said. "I don’t see a huge difference. Especially given Bush has a very mixed record."

Perhaps the largest variance between the two men's economic plans is that of perception, Bartlett said.

"I think that the big difference is that Bush sees the negative things in the last four years as things he inherited, things he had no control over," he said. Kerry, on the other hand, tries to "lay the blame for job losses or whatever at Bush's feet."