Gephardt's tax-cut plan sends warning to Clinton

THE BALTIMORE SUN

WASHINGTON -- House Democratic leader Richard Gephardt has sent a blunt message to President Clinton by announcing his own proposal for a middle-class tax cut before the White House has settled on an administration plan. And that message is that the president dare not move too far toward the political right in trying to deal with the new Republican majority in Congress or in trying to satisfy conservatives within his own party.

Indeed, the warning was blunt enough to make it clear that the embattled Clinton faces a complex and touchy situation within his own party as well as in confronting Newt Gingrich, Bob Dole and the newly ascendant Republicans.

Gephardt, who will be minority leader when Congress returns next month, didn't need to produce such a plan at this juncture. Congress is not in session, and he offered no details on how his proposal would work or be funded. But by acting now, before Clinton could go before the national television cameras, the Missouri Democrat established himself and his allies in the House as a counterforce to the Democratic Leadership Council (DLC) in the effort to write party policy.

Gephardt recommended tax relief for all families with incomes under $75,000 a year, whether or not they include children. By contrast, the House Republicans' "Contract With America" calls for a $500 income tax credit for each child in families with incomes up to $200,000, which Gephardt suggested was another tax relief plan for the affluent.

The Republicans also have called for a reduction in taxes on capital gains realized from the sales of stocks and property. By contrast, Gephardt called for "pay for productivity" legislation that would allow workers to share more in the profits companies earn from higher productivity.

The House leader argued that the message in the election returns last month was that the Democrats had failed to address what he called "a growing sense of insecurity" among working-class Americans about whether they will be able to keep their jobs and improve their standard of living. The latter hasn't happened, Gephardt said, despite the gains in the economy realized during the first two years of Clinton's stewardship.

But Gephardt's analysis of the election returns was less intriguing than his decision to demonstrate in a forceful way that he doesn't intend to be a potted plant in the next two years while he rules a minority and plans for a Democratic comeback to recapture the House in 1996. Although he spoke of trying "to work in tandem with the White House," he stressed that House Democrats will be "independent" in their judgments. "We're going to be a major part of this debate," Gephardt said at a forum put together for his speech.

Clinton's own middle-class tax reduction plan is expected to be revealed on national television later this week. And it is likely to be focused on a group of taxpayers much less affluent than those who earn the $200,000 a year the Republicans set as the upper limit on their largesse. But it would be no surprise if the president's plan were less sharply aimed at the working class than the one advanced by Gephardt.

At this point, all this is just so much inside baseball. Nobody has produced any legislation, and the Senate hasn't even joined the bidding yet. But the fact that the president is in such deep political trouble gives added dimensions to such things as the DLC's willingness to criticize him so openly last week and, now, Gephardt's declaration of independence. Although Gephardt may scoff at the notion, there are Democratic insiders here who would very much like to see him challenge Clinton for the party's presidential nomination next year.

That is not what's involved here, however. The operative question in Washington these days is how the president responds to the extraordinary new pressures being brought to bear upon him by the election returns of 1994 -- in short, how he positions himself on key issues to project a stronger image politically for both himself and his party. Dick Gephardt is saying only that the House Democrats intend to be one of the influences in defining their own party in the next two years.

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