Analysis
Democratic Rivals' Missed Target: Economy
By Dan Balz
Washington Post Staff Writer
Wednesday, June 18, 2003; Page A01
President Bush's economic record should present an attractive target for the Democratic presidential candidates. Instead, it has become another source of division, disagreement and, so far at least, a missed opportunity to change public opinion.
Under Bush, the U.S. economy has lost about 3 million private-sector jobs. The unemployment rate has risen from 4.2 percent to 6.1 percent. The Dow Jones industrial average, despite a recent rebound, remains more than 1,100 points below the levels of January 2001. The president's tax cuts and spending increases have turned budget surpluses into record deficits that some experts say amount to a long-term fiscal crisis.
In the face of those figures, Democrats appear stymied. The party's congressional wing, operating in the minority, has neither the votes nor the megaphone to carry an economic message, party strategists acknowledge. The party's presidential candidates speak with nine voices, and they have failed to make the economy a consistent and coherent focus of their messages. Polls show that the public neither blames Bush principally for the state of the economy nor recognizes a Democratic alternative.
"There's a large part of the Democratic Party that wants to wait for the unemployment rate to deliver them the next election," said Jeff Faux of the progressive Economic Policy Institute. "Maybe that will happen, but it's easier for them to do that than to go out there and put together support around some program."
The candidates and the party's congressional leaders say they have tried. House and Senate Democrats offered alternatives to Bush's tax cuts earlier this year, and succeeded in reducing the size of the tax cut that eventually passed -- but the shape of the final package was the president's.
Many of the candidates have given, at some time over the past six months, a major economic speech, and harsh criticism of the president is threaded through their standard speeches along the campaign trail. It has added up to little, in part because no one has a full-blown economic program. Rep. Richard A. Gephardt (D-Mo.) says his proposal to provide near-universal health care coverage amounts to an economic program, but even some Democrats sympathetic to it say it is more a social program than an economic plan. Other candidates have plans still in the making.
Beyond that, Bush has done to the Democrats what former President Bill Clinton did to the Republicans during his second term: used his own economic priorities to box in the opposition.
When balanced budgets were the consensus in the late 1990s, Clinton blocked GOP efforts to cut taxes with the message "Save Social Security first." With Bush's tax cuts now the law of the land, Democrats appear caught between their desire to call for significant -- and costly -- steps to create jobs and their impulse to try to recapture the issue of fiscal responsibility.
No matter which way they decide to go, Democrats would have to repeal some or all of Bush's tax cuts, and the president's political advisers already talk about having set up the Democrats for a debate about whether to raise taxes rather than just about the state of the economy.
"Bush's drumbeat for tax cuts doesn't do much for the economy, but so far it has flummoxed the Democrats," said Bruce Reed of the centrist Democratic Leadership Council. "They need to figure out a way to get off the defensive without walking into Bush's trap."
That is only part of the problem. James K. Galbraith, an economist who teaches at the University of Texas, said the greater problem is the Democrats' reluctance to face the economic issue realistically. "They have got to get serious," he said.
Galbraith said there is no way to return to the economic conditions of the late 1990s, because that boom was fueled partly by a speculative bubble in technology. Nor is it sufficient to blame Bush alone for all the current problems. Liberals and conservatives in the party, he said, must resist temptation.
"The temptation for conservatives is to say the problem is the budget deficit and returning to the Clinton policies of balancing the budget would return to the Clinton-era prosperity. That just isn't true," Galbraith said. "The temptation for liberals is to promote an easy solution through a stimulus program and simply say Bush's tax cuts were mistimed and misdirected. That's partly true, but it doesn't mean all problems would be solved by a tax cut that was front-loaded and aimed at the working class."
Democratic pollster Mark Mellman said Clinton's success in repositioning Democrats as the party of fiscal responsibility has had the unintended consequence of narrowing the discussion of economic policy to the issue of fiscal policy and the state of the deficit.
"In the old days, our economic plan didn't have much to do with balancing the budget," Mellman said. "In the recent period, the health of the economy has been identified almost exclusively with the nation's fiscal situation, and given the state of the fiscal situation, a lot of Democrats feel like they don't have a coherent thing to say other than that in the long term, we've got to get back to economic health."
As with their positions on the war against Iraq, the Democratic presidential candidates are spread out along the political spectrum in their approach to the economy. Some, such as Gephardt or Rep. Dennis J. Kucinich (Ohio), have decided the deficit is Bush's problem, not the Democrats'. Gephardt's program would ensure that the huge deficits projected under Bush's economic program would continue under his health care plan. Only economic growth will reduce the deficit, he has said, and his proposal, which would cost more than $2 trillion over 10 years, will help generate the kind of economic activity that will get the job done.
"Republicans have shown they've got no interest in cutting spending, and they created the biggest deficits ever," said Gephardt aide Steve Elmendorf. "They don't seem to view it as a political issue, so I don't know why we as a Democratic Party should view it as an issue."
Other Democrats, such as Sen. John Edwards (N.C.), former Vermont governor Howard Dean and Sen. Joseph I. Lieberman (Conn.), have said the party must not abandon fiscal responsibility. But none has done the hard work of putting together a comprehensive package to get the economy moving and subjected it to scrutiny to measure its impact on the deficit.
Robert Borosage of the Campaign for America's Future, which brought together progressive Democrats recently for a Take Back America conference, said everyone in the party agrees that long-term deficits matter and that short-term stimulus is required. "Where the disagreements come up are, are you taking back some portion of the tax cuts in order to build schools or create health care, or are you taking them back to balance the budget," he said.
Another area of disagreement is whether to repeal all of Bush's tax cuts, as Dean and Gephardt have proposed, or repeal only those parts that primarily benefit the wealthy and preserve tax cuts for the middle class, something that Lieberman, Edwards and Sen. John F. Kerry (Mass.) have proposed.
Yesterday, Edwards criticized "some in my party" who believe that "we can spend our way out of every problem," saying it has not worked in the past. Instead, Edwards offered several tax cuts aimed at the middle class and used them to argue that Democrats can draw a sharp contrast with the president over values by rewarding work rather than wealth.
Gene Sperling, who served as Clinton's top White House economic adviser and sides with some of the New Democrats on the issue of fiscal responsibility, calls the long-term deficits created under Bush the most serious economic threat facing the country. "When the public realizes this is not a one- or two-year blip but that they [the Bush administration] have dug a hole for decades to come, there will be even less public support" for the president's economic record, he said.
But Sperling also said Bush's approach means a huge political challenge for the Democratic candidates. "While these tax cuts are very harmful to the nation's fiscal future, as a cold political tactic, they unquestionably put Democrats in the position of having to take far more politically risky and even politically courageous positions to put forward a progressive agenda that is also more fiscally responsible."
The DLC's Reed said he remains optimistic that by next year, Democrats will find their voice and a plan for challenging Bush where he is most vulnerable. "My advice to candidates," he said, "would be to remember that the economic debate is about a lot more than spending and taxes. It's about corporate responsibility, it's about empowering citizens with the tools to get ahead, and as long as we let Bush define the terms of the debate, we'll never show the country we have a better way."
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