The chairman of the House Budget Committee said Wednesday that President Bush's fiscal 1992 budget gives a major boost to the rich, despite its proposal to shift many federal benefits from the well-to-do to the poor.
Rep. Leon Panetta, D-Calif., said that although Bush's $1.45 trillion spending plan would increase costs and reduce benefits for well-to-do people under Medicare and other programs, they would benefit even more from the president's proposal to cut the capital gains rate.Panetta said that although the well-to-do could lose hundreds of millions of dollars under Bush's plan to reduce their benefits, they would gain billions of dollars if the rate of the capital gains tax - paid on sales of property - was reduced.
Bush administration Budget Director Richard Darman said the plan to shift benefits would achieve "better targeting on the poor." And he said reducing the capital gains tax would in the long run benefit everyone because it would spur the economy.
On Tuesday, Darman defended the budget before the Senate Budget Committee and ran into criticism from Democrats there as well.
"I think the 1992 budget substantially ignores the pressing economic and social needs of working-class Americans," Sen. James Sasser, D-Tenn., the Budget Committee chairman, said Tuesday.
A chief domestic feature of Bush's budget is a series of proposals to increasingly shift to the well-to-do the burden of paying for benefit programs.
The president would triple the $31.80 monthly Medicare premium for doctors' bills that must be paid by people earning more than $125,000 a year. He would halt farm subsidies for people whose annual non-farm income exceeds $125,000, and shift college loans and grants, school lunch funds and veterans benefits from the wealthy to the less well-off.
"Wiser and more equitable distribution of federal benefits is key to fairness and to meeting critical national needs," the budget document says.
This has not impressed many Democrats.