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Forbes Anticipates Dole's Economic Plan

Aired May 22, 1996

[Forbes]

JUDY WOODRUFF, Anchor: Former GOP presidential candidate Steve Forbes clearly does not view President Clinton as a champion of tax reform, but will Forbes be satisfied with a package ultimately offered by the candidate he is supporting, Bob Dole? Steve Forbes joins us from New York, just hours after his meeting with Senator Dole here in Washington. Thanks for being with us.

FORBES: How are you, Judy?

WOODRUFF: I'm fine, and this was what, your first face-to-face meeting with Senator Dole since the campaign. Did you make up?

FORBES: Yes. Actually, we had done that before, on the phone, after I ended my campaign. So we've talked a couple of times, but this was the first face-to-face meeting. It was very cordial, very encouraging. We discussed growth issues. He's keenly interested in having a dynamic program to get America moving again. He recognizes what I think we all recognize, that there's enormous anxiety out there that we're not fulfilling our potential. Incomes aren't growing the way they should, so he wants to put together an exciting, bold package, and so I think it was a very encouraging conversation. He did not rule out hardly anything. The only thing he ruled out was the mortgage deduction on the flat tax, but other than that, everything seemed to be open.

WOODRUFF: Do you have some hope that he may endorse some sort of flat tax, because his staff seems to be telling reporters that that's not going happen.

FORBES: Well, I think what he plans or hopes to come up with, after he finishes his consultations, is a package that will combine tax cuts with dramatic and radical tax simplification. He did sign off on the Kemp Commission on the principle of a single-rate system, and so even though there might be some difference between us, a little bit, on some of the details, the principles are absolutely there. He seems very committed to do it, and seems raring to go on it. He did not put a deadline on coming up with a package because he wants to be sure it's exactly right when he goes forward with it.

WOODRUFF: Is there a point below which you could not call that package pro-growth? In other words, does that single rate have to be above a certain number for you, Steve Forbes, to accept- be satisfied with what Bob Dole is endorsing?

[Quote from Forbes]

FORBES: Well, there are various ways to reach the goal of a single- rate system. You could have a transition for a year or two, where you have two rates, like we did for a while after 1986. So there are various ways to do it. The key is that we're moving in the right direction, that he makes a firm commitment that we are going to have dramatic simplification to not only get growth, not only to take the pressure off two-income families, create better-paying jobs, but also to remove the political pollution of the whole tax code in Washington. And now that he's removing himself from the Senate, I think that he's going to come up with some very exciting proposals, and I think he'll have the credibility to say, if he proposes it, he can get it done.

WOODRUFF: Well, if there a range? I mean, for example, his staff is saying, apparently today, that they're looking at anything as much as a 15 percent single rate. Is that- is it 15 down to what that you would consider acceptable, that you would consider genuine, pro- growth policy?

FORBES: Well the key is reducing what they call marginal tax rates. That is, the rate that you pay on each extra dollar you earn. After all, taxes are a price and when the price on good things like work and innovation are too high, you get less of them. And so I think you are going to see rate reduction. I think you are going to see a goal of a dramatic tax simplification. The specifics we did not get into. I think he already has a group of people starting to work on that. He invited me to put input on that and attend some of those meetings, so I think he's moving in the right direction. But I didn't put down any markers because you have to see what the whole package contains. We also discussed things like Medical Savings Accounts, which are a very exciting way to reform Medicare and reform our health care system by returning control, much more control, back to the consumer. We had a variation of it at Forbes for four years and it's worked very well.

WOODRUFF: Just quickly, then - are you saying that you're prepared to support whatever he comes out with, or you're still waiting to see what he proposes?

FORBES: Well obviously are waiting with a growing anticipation and excitement what he comes out with. I'm very encouraged by what has happened in the last few days, that it will be a dramatic, pro- growth package. And I think the specifics are not yet in place; he has not signed off on anything yet or really ruled out much of anything. So I think it's wide open and so I think it's going to be a good package at the end.

WOODRUFF: All right - well Steve Forbes, we thank you for being with us.

FORBES: Thank you.

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