It’s still the economy, stupid. The President gets it. The victory balloons from 2002 were still afloat when he sacked his economic team and named a new batch of former CEOs and Ford Administration retreads to “sell his economic program.” And new Democratic House minority leader Nancy Pelosi gets it, as she convened 150 members in Washington to begin putting together a plan to get the economy moving.
Democrats of all stripes understand that the absence of an “economic message” cost them dearly in the last election. Bush wanted it to be about national security and “rolled out” the debate on Iraq and turned “homeland security” into a partisan club. Democrats wanted the election to be about the economy, but offered nothing but a reminder that it was lousy. The vast majority of voters wanted to vote on the economy, but two-thirds said they had no clear idea from either party of what it would do about it.
Pelosi is intent on not making that mistake again. She wants to draw clear contrasts, starting with the upcoming debate on the stimulus plan. With the Administration putting together a new batch of tax breaks for corporations and the wealthy as the centerpiece of its plan, a Democratic program that “puts people first” would offer a stark contrast to this “trickle down” rerun.
At the House gathering, Larry Mishel, the new president of the Economic Policy Institute, described the elements of a common sense alternative: temporary tax breaks targeted to low- and middle-income earners; assistance to beleaguered states on homeland security, schools and soaring healthcare costs; and extension of benefits to unemployed workers–something Republicans refused to pass in November. A deficit package, he argued, should be temporary, but big enough to jump-start the economy, with enough money to help states and localities avoid debilitating cuts.
But unity isn’t in the Democratic lexicon–particularly in the absence of a national leader. Former Clintonistas want the party to be the keepers of budget balance. They urge tying any short-term stimulus plan to long-term “freezing” of the upper-end Bush tax cuts that have yet to come into effect–a sound idea but one that irritates the conservative Senate Democrats who voted for the Bush tax cuts and have doubts about whether a stimulus is really needed. Progressives are happy to take on the Bush tax cuts, but want to emphasize jobs and growth, not fiscal austerity in a economy verging on deflation.
Party strategists worry that Bush will co-opt Democratic plans, adding their proposed tax cuts to his own package. That’s what he did last time when Democrats called for an immediate tax rebate, in contrast to the Bush tax plan. Bush simply embraced the rebates and had the IRS send out the checks in his name.