Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 24, 1990 TAG: 9003242474
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: METRO
SOURCE: The New York Times
DATELINE: INDIANAPOLIS LENGTH: Medium
The endorsement, as well as a similar statement of support from a group of conservative Democrats meeting in New Orleans, breathed new political life into the proposal, offered last December by Sen. Daniel Moynihan of New York.
But it also dramatized the schism in the party between its political wing, which yearns for issues to help it recapture the White House, and its governing wing, which already holds power in Congress and worries about the impact on the federal deficit of a substantial tax cut.
Brown, the party's chief political figure, called the Moynihan plan a "political stroke of genius" that would help Democrats re-establish themselves as the party of working people, while Republicans pushed a capital gains tax cut that would benefit the wealthy.
Brown was joined in support of the tax cut by both the executive committee of the Democratic National Committee, meeting here, and by the top officers of the Democratic Leadership Council, a caucus of the party's more conservative wing, meeting in New Orleans.
The party executive committee unanimously approved a resolution, offered by New York's state chairman, John Marino, urging Congress to adopt a plan cutting Social Security taxes.
The resolution portrayed the Social Security tax as "a regressive tax which falls most heavily on low- and middle-income workers." Rolling it back would produce "a tax cut for working people and small businesses," the resolution said.
Moynihan's proposal would slash Social Security taxes by $62 billion over two years, thus eliminating a retirement fund surplus that has been used to help offset the federal budget deficit.
His proposal was intended to be something of an economics lesson to show how in the last decade the burden of taxation shifted from income taxes to the Social Security tax and to show how the retirement funds were being used to mask the government's operating deficit.
The proposal offers no suggestions for how to reduce the enlarged deficit that the loss of Social Security funds would cause.
Asked about the concerns that Democrats in Congress have about the deficit, Brown replied: "We think the matters of principle have to be decided first."
A leader of the congressional Democrats, Sen. Lloyd Bentsen of Texas, chairman of the Finance Committee, quickly reasserted his opposition to cutting Social Security taxes.
"I don't want to get in a bidding war with the Republicans on cutting taxes because I don't know where that one stops," said Bentsen, his party's 1988 candidate for vice president, "and we have a responsibility to get this deficit down."
Bentsen said that Democrats would be at a disadvantage in a bidding war with the Republicans because, "they don't care how far they'll go."
Rep. Steny Hoyer of Maryland said it was only natural that the party's political operatives would see the Moynihan plan differently from the congressional leaders.
"They don't have to implement it," he said. The party leaders were fulfilling their job, Hoyer said, by pushing a politically attractive tax cut. But he added: "What do you do next? How do you meet that shortfall."
by CNB