- The Washington Times - Sunday, October 7, 2007

Political broadsides about the economy have been all but missing in the Democratic presidential debates, in sharp contrast to Republican candidates who are calling for more tax cuts to boost economic growth.

The economy continues to be a paramount concern among voters, according to the latest Gallup poll, which found that economic issues were the third-highest priority for a large majority of Americans after the war in Iraq and terrorism.

Despite predictions in some quarters that the economy is heading into a recession as a result of the steep decline in housing sales and the credit crunch caused by mounting defaults among subprime mortgage holders, it continues to show signs of resilience.

A jobs report Friday showed that the economy produced 110,000 new jobs in September, the 49th consecutive month of job growth. The growth set a “new record for the longest uninterrupted expansion of the U.S. labor market,” the White House said Friday.

But the Gallup Poll also found that “Americans are more positive about their personal financial situations than about the economy as a whole.”

The proposed solutions to cure what ails the economy could not be further apart between Democrats and Republicans.

Among the front-runners, the Democrats’ chief prescription for the economy is raising the top tax rate on wealthy Americans to pay for universal health care and other social-welfare proposals.

Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, and former Sen. John Edwards of North Carolina have all said they would raise income taxes if they were elected.

The Republican front-runners, on the other hand, are calling for additional tax cuts to spur job and income growth, business investment and savings. They say the cuts will help Americans cope with higher gasoline prices, health care costs and college tuition and to prepare for retirement.

In an address to the Americans for Prosperity Foundation on Friday, former New York Mayor Rudolph W. Giuliani declared himself a dyed-in-the-wool “supply-sider.”

“If the government returns money to the private economy, that economy grows,” Mr. Giuliani said. “Low taxes stimulate growth, they expand freedom, they spark innovation and they increase prosperity.”

He said he cut taxes by $9 billion as mayor in an effort to revitalize the city’s sagging economy.

“And by the time I was finished, we were collecting 41 percent more revenues from the low tax than we used to collect from the high tax,” Mr. Giuliani said. “So don’t tell me that tax cuts don’t work.”

Former Massachusetts Gov. Mitt Romney also struck a tax-cutting theme in his address to the group Friday, a day after he announced his “conservative blueprint to lower taxes” during a campaign appearance in New Hampshire.

His blueprint calls for making President Bush’s tax cuts permanent and cutting tax rates further if he becomes president; eliminating the tax on savings, capital gains and dividends for any American earning less than $200,000; abolishing the estate tax; cutting the corporate tax rate; and making medical expenses tax deductible.

“Lower taxes are the key to ensuring continued economic growth and job creation,” the Romney campaign said in a statement accompanying his plan.

But there is some disagreement on the Republican side, as well.

Mr. Romney and Mr. Giuliani have traded barbs in the past week over their tax and spending records.

Mr. Romney’s sweeping tax-cut proposal won unqualified praise from the libertarian Cato Institute, which called it “a very pro-growth tax agenda” that would “raise American incomes.”

“Romney’s plan is entirely a supply-side tax policy,” said Chris Edwards, director of tax policy studies at Cato. “Every point is good for the economy. It changes marginal tax incentives for taxpayers to work more and save more. I’m impressed.”

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