EMERSON SAYS TAX CUT COULD LIFT ECONOMY

A cut in the capital gains tax could aid the nation's ailing economy, U.S. Rep. Bill Emerson maintains.

The 8th District Republican said Tuesday that he would like to see such a tax cut included in any "economic growth package" that Congress might consider in the 1992 session.

In an interview at his office in the Federal Building in Cape Girardeau, Emerson talked about issues facing Congress in the upcoming session, which begins Jan. 22.

He talked not only about tax cuts but also about such issues as reauthorization of the clean water act and the trade imbalance with Japan.

Both Democrats and Republicans have called for tax cuts in this presidential election year.

Emerson said he believes Congress may pass some type of economic package this year.

"I see strong potential for development of an economic growth package that would have some tax cut aspects to it," he said.

There are a number of proposals being made by lawmakers on how to improve the economy. Emerson said he favors allowing Americans to withdraw money from their Individual Retirement Accounts to buy their first homes or finance their child's college education.

He said he also wants to see a cut in the capital gains tax rate, something that President Bush has favored for some time.

"I abhor the idea of class warfare and I don't like the rhetoric that the capital gains cuts have only to do with favoring the president's rich cronies," said Emerson.

"I don't think we have many extremely wealthy people in the 8th Congressional District. If we do, I haven't heard from them on the subject of the capital gains tax," he said.

But Emerson said he has heard over the past several years from "hundreds upon hundreds" of owners of small businesses, farmers and property owners who favor a cut in the capital gains tax.

"I think it could be an economic stimulus that is much needed," said Emerson, adding middle-class Americans would benefit most from a cut in the capital gains tax.

He maintained that a cut in the capital gains tax would pass the House "by a very significant margin."

He said such a measure was previously passed by the House but stalled in the Senate.

Emerson also said the federal tax reform law needs to be changed "to restore some incentives for real estate" development.

Asked if tax cuts would only provide a "quick fix" for the economy, Emerson said he doesn't believe Congress can provide such a fix. "I don't think there is anything such as a quick fix, but I think you can jump-start" the economy, the congressman said.

Emerson said he believes the new highway act may provide such a jump-start by providing federal funding for highway construction.

"This is going to be a law where we are going to see surveyors surveying and asphalt trucks hauling asphalt and concrete trucks hauling concrete.

"It's jobs. This new highway law is going to put 30,000 people to work in Missouri alone," he said.

Emerson said he is glad Bush is "refocusing his emphasis on the domestic agenda."

Critics have said that Bush has paid too much attention to foreign affairs and not enough to the domestic issues.

But Emerson said that "in these uncertain times where we are seeing such dramatic, radical upheaval and change in the world ... we would be very unhappy with the president if he wasn't giving that his most considerate attention, too."

He said, "So while we get frustrated that we think he is fiddling around too much with foreign affairs, in the volatile world in which we live I think we should consider ourselves blessed to have a man of George Bush's foreign affairs background in the presidential office."

Emerson said conservative columnist Patrick Buchanan, who is challenging Bush for the Republican presidential nomination, "raises issues that need to be raised."

But the congressman said he disagrees with what he termed as Buchanan's "isolationist" views.

"I think it is very unrealistic, given the modern state of travel, transportation, communication and technology, that America could withdraw into some isolationist cocoon.

"I don't think it would be good for the ideals for which America stands, and I don't think it would be good for the economy of America were we to be isolationist," said Emerson.

As to the clean water act, Emerson said the federal law expires this year and Congress is already working on writing a new law. Such a law will have "vast implications" for Southeast Missouri in regards to wetlands, he said.

Emerson said Congress has an opportunity to simplify the law and make the regulations more understandable.

Part of the problem now is that there is no legal definition as to what constitutes wetlands. Instead, there have been regulatory interpretations by four different federal agencies, which, Emerson said, "has brought about mass confusion and conflict, and concern and interference with people's livelihood, particularly in the agricultural arena."

On another matter, the congressman voiced support for Bush's current trip to the Far East and his efforts to obtain trade concessions from Japan.

"I think what Americans are striving for or should be striving for is not total protection and not total free trade, but fair trade," said Emerson.

He predicted that the president's trip would bear positive results in dealing with the trade imbalance.