How will George Bush pay for the government he wants?

This essay originally appeared in Newsday on Oct. 11, 1989.

WHEN THE middle class and the rich finally figure out that the poor, who will be forever with us, are the work force of the 21st Century; that it is not just the poor people who will always be with us but drug addiction and the social disorientation felt even in the suburbs, then they will see that the misery of the poor is our misery.

Now that we're not focused on the Cold War, we are free to look around at our society and ourselves. Drugs have shocked us into a new self-realization of the condition of this society. Even before drugs, the homeless came as a real shock. It wasn't just a matter of the compassion we felt when seeing the homeless, but a matter of ineffectuality. As with drugs, we could see, perhaps as never before in America, that our society had fundamental problems with which we seem unable to cope.

At the same time, the middle class is just beginning to figure out that the rich are doing better than they ever did, while they themselves are stalled. Just as they are unsettled by the homeless, they are beginning to become unsettled about giveaways to the rich when the quality of their kids' schools is collapsing for lack of funds.

They know that the top tax rate used to be 70 percent and now it is going to be 28 percent. They remember that when the first tax reform bill was announced, President Reagan was willing to settle for a top rate of 38 percent. What was so bad about leaving it at 38 percent? That's what the president of the rich wanted.

It doesn't take a tax genius, just a school parent or someone who lives in an unsafe neighborhood, to realize that billions and billions of dollars that might be used for falling bridges and the drug war are going to end up in minks and Jaguars when the top rate drops from 38 percent to 28 percent.

So the middle class is saying, "Wait a minute. We haven't gone anywhere in the last 12 years. The guys above us are doing great, the people beneath us, well, they may not be working hard enough, but we also haven't done so hot. And with the plague of drugs and everyone being mugged who is not rich enough to move to an island somewhere, we're threatened."

Reagan spent eight years telling us that the homeless, whose numbers his policies helped increase, chose to live on the streets. He told us there was no reason to be poor. Look at all those want-ads in the newspaper, he told us. And let's face it, he added, we already put money into curing poverty and it didn't work. So, why try again?

He told the middle class they had no moral obligation to the poor and, in any case, they'd be dummies to waste their money on the terminally indolent.

George Bush campaigned in that way, but it was never his instinct. As soon as the campaign was over, his speechwriter, Peggy Noonan, started pouring out volumes of Democratic poetry.

The real meaning of George Bush's rhetoric has not been properly appreciated: He has rejected Reagan! His call for a kinder and gentler America is a response to the disturbed sensibility of the middle class. On Martin Luther King Jr. Day, he said there are many poor people and minorities who must be admitted to the circle of opportunity. It's not trees that pollute, it's acid rain! Drugs are a federal problem. Education is deteriorating. In an economy where most women have to work, there is need for day care.

Having never admitted to any of these realities made Reagan stronger politically. His rhetoric could never be tested by the resources he put up to deal with the needs he admitted.

Politically speaking, I think the rejection of Reagan will prove to be Bush's mistake. He's admitted the needs, but figures he can forget the rest, or blame the Democrats for breaking Gramm-Rudman to pay for social programs. But he can't get away with that now, not after coming up with $166 billion to bail out the savings-and-loan industry. If he can pay for that, he can pay for this.

For the moment, we seem to be able to get by with a kind of charming acquiescence in our leadership. The smiling face of good fortune, like Dan Quayle, has been Bush's companion so far. Without even flexing a military muscle, we have seen Poland turn democratic and capitalist. Bush has not yet had any real occasion to take a position that has put him on the wrong side of the polls.

But that will change when it becomes clear that truly coping with our interdependent problems at home requires aggressive leadership and money. What happens then?

Bush has declared war but can't pay for the troops. Would Winston Churchill declare war against the Nazis and then call the accountants to see if he could afford it? You can't do that.

At some point, you have to be realistic and say, "Look, what we need here is revenues. I'm on the line; we're raising taxes." If you don't say that - and yes, I am willing to say that - you can't get away with the kinder-and-gentler rhetoric.

You can't be fooled by the Mondale experience and think that anybody who stands up now and tells the American people the truth about taxes is going to lose. It's not true.

But you can't raise taxes the old way.

First, the need has to be absolutely apparent. I think drugs, crime and AIDS have taken care of that.

Second, you cannot say "taxes" in the abstract. That means everybody, Cuomo, the corporation, the taxicab driver. That's silly. You have to say which tax and on whom. That immediately identifies who will bear the burden. Everybody else is off the hook, and they're with you.

If you say you are going to tax 12 percent of the people, the other 88 percent will be with you. Let's ask why the top tax rate should be 28 percent, instead of 34 percent, or even the 38 percent Reagan initially sought? Revenues from that kind of adjustment would solve much of our budget problem. Let's ask - why not put a 1 percent surcharge on income tax nationally to generate $10 billion to fight crime?

Thirdly, and unfortunately, I think you have to identify the specific purpose of the tax. We've lost the opportunity in the American political process to say, "I - the governor, the state Legislature, the Congress - am going to tax you. I'll spend it well." Those in government must show how the revenues are going to be spent: on infrastructure, education, on drugs.

The Reagan message was seductive. He argued, "You can have all your money back in tax cuts; I'll give you the strongest defense you ever had, $750 billion more than before, and I'll still balance the budget." It's called nirvana. Heaven on Earth. A cornucopia of endless fruits and abundance stimulated by tax cuts.

Its real name was Fantasy. Reagan's worst sin, though, was that this fantasy seduced the nation into a state of indifference. Now, however, there is an awakening. The key word here is interdependence. What affects one of us affects all of us, in our own society and globally, whether we are talking about the underclass or the environment.

This new self-realization of interdependence is generally unsettling to the middle class. It creates a certain anguish; it shakes people and rouses them from the complacency of the Reagan years. Once people get into the mood of looking around and trying to make things right again, once they accept that things are not right, then you can start talking to them about how to straighten out the house. The American electorate is very close to that mood now.

Mario M. Cuomo was governor of New York from 1983 to 1995.