Democrats Go Adrift on Taxes, Trade

WASHINGTON – For a brief time in their debate Sunday, Democrats seemed to be hewing to a New Year's resolution to stick more carefully to the facts on taxes, the budget and more. But old habits die hard.

As in the past, Howard Dean (search) declared, "Middle-class people did not see a tax cut," despite the lower tax rates enacted for all income levels and the higher tax credits for people of low and moderate income.

Rep. Dick Gephardt (search) of Missouri accused opponents on the stage of voting in favor of trade agreements that several had never voted on at all. But in defending themselves against Gephardt's misrepresentation, several neglected to mention that they had voiced support for trade pacts they were now criticizing.

The first Democratic presidential debate of 2004 featured a reality-check statement from North Carolina Sen. John Edwards (search), when he was asked about balancing the budget. "If somebody gives you a straight answer to that question, you can't trust it," he said.

"The reality is, everybody on this stage is talking about spending money," he went on. "There is a tension between spending money and reducing the federal deficit. We should be straight with people about that."

Against the backdrop of that lecture, Dean declared, "I am going to balance the budget, and I'm going to do it in the sixth or seventh year of my administration."

This, despite the fact he has not worked out his plans for middle-class tax relief, a crucial chunk of any balanced budget plan. "Ultimately, we will have a program for tax fairness," he said when asked what taxes he might lower after keeping his promise to repeal all of President Bush's tax cuts.

Dean repeated his frequent claim that middle-income Americans have not seen their taxes go down under Bush: "There was no middle-class tax cut," he declared.

In fact, their taxes did go down. But Dean went on to explain what he really meant -- that most people are worse off because college tuition, health care premiums, property taxes and other state and local taxes or fees have gone up by more than Americans have saved under the Bush tax cuts.

But the head scratching did not end there.

He said 60 percent of Americans got a tax cut of $304 from Bush -- revising a statement in an earlier debate that 60 percent saved $325.

Those cuts appear to be in the ballpark when it comes to the poorest 60 percent of Americans -- many of whom pay little federal income tax to begin with.

But the independent Tax Policy Center has calculated much larger tax cuts for middle income earners -- $1,012, for example, for someone making $40,000 to $50,000. Even people making $20,000 to $30,000 saved $638 on average, the center found.

Indeed, viewers of the Iowa debate heard conflicting figures from the candidates on what most people gained from the Bush tax cuts -- Dean's $304, Gephardt's $600 and Connecticut Sen. Joseph Lieberman's $1,800 for a family of four.

"As a result, you would be very confused," said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania.

Jamieson, who has been tracking misstatements in each debate, said Lieberman "is being the most careful about what he's doing with his numbers."

But she faulted him for calling Bush the worst environmental president in history. "Clearly, hyperbole," she said, noting, for example, that America's water quality was so bad 100 years ago that it threatened lives.

Even so, she said Democrats for the most part did not repeat their misrepresentations of job losses under Bush in this debate and were somewhat more careful with the facts than in the past.

They still managed to drift off course on trade, led by Gephardt when he said everyone on stage except Rep. Dennis Kucinich of Ohio and himself had voted for the North American Free Trade Agreement and for liberalized trade rules for China.

"They did the wrong thing," he said.

In fact, Edwards was not in the Senate when NAFTA was decided -- and he pointed out he had campaigned against it. Dean, the former Vermont governor, never was in Congress to cast a vote.

Gephardt acknowledged the mistake when Edwards called him on it. "I'm quite willing to say you weren't there," he said.

The discussion turned into a critique by several candidates against the weaknesses of free trade agreements. Carol Moseley Braun and Dean were among those who said trade agreements must include strong labor, environmental and human rights standards.

But Braun voted for NAFTA when she was in the Senate and Dean voiced support for that deal and the China agreement before he entered the campaign.