“This economy of ours is strong,” George W. Bush informed voters in Ohio. But if Democrats win control of the House of Representatives, he warned in Florida, “they’ll raise your taxes. It will hurt our economy, and that’s why we’re not going to let them get control.”
In late September the President momentarily interrupted his drumbeat on the threat Democrats pose to the failing “war on terror” to trumpet the threat they pose to the flailing economy. With Americans squeezed between sluggish wages and rising costs, the slogan “they’ll raise your taxes” rouses fears, just as “cut and run” does on Iraq. As in the Iraq debate, the President doesn’t tell us what he’ll do to get us out of the mess he’s made; he simply charges that Democrats will make it worse.
Just as in the Iraq debate, Bush’s claim regarding the economy is a true lie: Most Democrats have pledged to roll back the President’s tax cuts for the wealthy–but they’ve also championed tax breaks on college tuition and childcare that would benefit the vast majority of Americans. Just as in the Iraq debate, most Republicans will echo Bush’s charge, giving the GOP a clear message on the economy in the final month of the campaign.
Bush can’t govern worth spit, but he does know how to run campaigns. Polls suggest that his late-summer fear offensive helped rally disgruntled Republicans. His tax offensive is designed for broader appeal to families already struggling to make ends meet.
The challenge for Republican incumbents, just as in the debate on the war, is that they must distract the electorate from the failure of Bush’s policies. The economy is growing, CEO salaries are soaring and profits are up–but most Americans aren’t seeing the benefits. Their jobs and incomes are less secure. Companies are bailing out on healthcare benefits and pension obligations. Costs for everything from healthcare to college tuition are up. Personal debt and personal bankruptcies are at record levels. Americans are working harder and longer just to keep up.
So when Bush talks about how strong the economy is, most Americans think he’s out to lunch. He traveled to Cincinnati to hail a family-owned manufacturer that had added 125 jobs, touting this as a product of his tax cuts. AFL-CIO leader John Sweeney stepped on the story, calling Bush “unbelievably out of touch” to think he can fool the 195,000 workers who have lost good manufacturing jobs in Ohio over the past five years.
The economy ranks just after Iraq and terrorism as a central concern of voters. The issue is teed up for Democrats, since the President and the Republican Congress, catering to corporate lobbies, have acted consistently to make things worse. Their trade and tax policies have accelerated the flight of jobs abroad, the “outsourcing” that Administration economists claim is a benefit to the economy. The GOP has blocked any increase in the minimum wage for nine years and coddled employers who trample on labor laws and exploit undocumented workers, adding to the downward pressure on wages. They turned the prescription drug benefit into a drug company subsidy by prohibiting Medicare from negotiating lower prices with the pharmaceutical industry. They blocked efforts to hold Big Oil accountable for price gouging and fraudulent underpayment of royalties for oil leases, while lavishing billions in subsidies on oil companies and starving progress on alternative energy. They provided companies with incentives to abandon pensions and replace them with individual retirement accounts. They cut billions from the student loan program, even as interest rates were soaring on student and parent loans.
Despite its timidity, the little-noticed Democratic “New Directions” program offers a clear contrast to these follies. With new-found unity–a testament to the leadership–Democrats pledge to require Medicare to lower drug prices, to raise the minimum wage, to repeal tax incentives for moving jobs abroad, to cut college loan rates in half, to launch a drive for energy independence. By exposing the incumbents’ pay-to-play politics, Democratic challengers can show voters they are paying the cost of conservative corruption and that it’s time to clean out the stables.
Not surprisingly, polls show Democrats with double-digit leads on most economic issues, from healthcare to energy to education. Voters think corporations have too much power in Washington. Large majorities favor more regulation and accountability. Large majorities think the current Congress is out of touch with people like themselves. CEOs are about as popular as Mafia dons. Even on taxes, polls show Democrats well ahead of Republicans.
Fanning fear of taxes is the strongest card conservative incumbents have in a weak hand. Republican strategists hope the recent decline in gas prices, after a large and painful increase, will take the edge off what they call the “cost-of-living issue,” and that fear of taxes can distract from their mismanagement of the economy, just as fear of terrorism will distract from the failure in Iraq. A New York Times analysis of ad purchases in eleven competitive Senate races shows that taxes are featured in the highest percentage of Republican ads, far more than security. Healthcare, energy, the economy and jobs lead Iraq in Democratic ad buys.
For Republicans, “they’ll raise your taxes” is an attempt to connect your pocketbook with their growth strategy–lower taxes, smaller government, deregulation, etc. Generally absent on the Democratic side is any deeper grappling with the failure of these policies over the past quarter-century–or clarity in proposing a bold alternative. During the Bush years, conservatives have mortgaged the store. They’ve racked up record foreign debt and record budget deficits. We have the lowest interest rates in memory, but we’re still hemorrhaging private-sector jobs. Emerging threats like catastrophic climate change have been scorned. The growing deficits in public investment–from schools to alternative energy to competitive broadband–have been ignored. The corporate unraveling of the employee safety net–healthcare benefits, stable jobs, pensions–has been callously celebrated as the dawn of an “ownership society,” as in, “I’ve got mine, you’re on your own.”
Democrats are tongue-tied on these larger issues. The Wall Street/New Democrat wing of the party is still wedded to the conservative budget, trade and deregulation policies of the past. Bold new initiatives are strangled by the timidity, ingrained during the Clinton years, of tactical retreat. The New Directions platform promises to rectify the excesses of the right, but it doesn’t connect this pledge to a new growth strategy for the economy.
If populists like Sherrod Brown in Ohio, Bernie Sanders in Vermont and Jon Tester in Montana are elected, they could help crystallize this debate before 2008. And if Democrats succeed in taking the House, progressive committee chairs like George Miller and Barney Frank can begin that bigger conversation through hearings, investigations and legislative battles. The AFL-CIO is leading an effort to develop a broader economic alternative to the failed conservative agenda.
In 2006, however, voters looking for answers on the economy will have a hard time finding them. Headlines from Iraq and the din of the war debate drown out economic issues. Republican incumbents are advertising their new-found independence from the President, blurring differences and going negative, often in direct personal attacks on their opponents. Neither party is offering voters a strategy for dealing with the growing structural insecurities of today’s economy. Neither rouses the country to a new vision of a more just, more prosperous society.
But beneath the clamor, there will at least be a clear choice between the two parties. Democrats promise to reverse the costs of Republican corruption. Republicans promise to stop Democrats from raising your taxes. Both appeal to your pocketbook. Democrats will rely on the growing sense that it is time to throw the bums out. Republicans will stoke fears that change will lead to something worse. No wonder turnout is likely to be low.