How the Economic Slowdown Helps Sell the GOP Budget

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Bush speaks about the budget and his plans for Medicare and Social Security

Maybe all the Republicans needed during those endlessly frustrating Clinton budget fights was a good economic slump. The slowdown is not only "real," as George W. Bush needlessly pointed out in a campaign-style stump speech from Harry Trumanís hometown Tuesday, itís given the White House the perfect vehicle to sell Americans on the articles of the Republican fiscal faith.

The argument:

  • One: never mind about the surplus — the tax cut was the surplus, and the people deserve it returned to them.
  • Two: never mind about the tax cut — not only did the people deserve it, they needed it, thanks to the stumbling economy that he inherited from Bill Clinton.
  • And three: never mind about what Democrats say we could have spent the money on instead — economic growth comes first, and that was what the tax cut was for.

    GOP: The numbers add up

    Certainly for Bush and the Republicans, it all adds up just fine. The numbers, Bush said Tuesday, will illustrate "that we've got enough money to preserve and protect Social Security, that we'll pay down over $100 billion of public debt, thatÖ every dime that comes into Medicare, will be spent on Medicare," Bush said Tuesday. "And we can meet our priorities when it comes to our military and ... education."

    And sure enough, Wednesday the White Houseís accountants at the Office of Management and Budget had the numbers to prove it: When $157 billion in Social Security money is set aside, the federal budget surplus for 2002 — thanks to some nifty accounting — stands at a cool $1 billion. In other words, everythingís perfect.

    How will the Democrats respond?

    Which leaves the Democrats in a bit of a bind. This week was the White Houseís turn to crunch the numbers; next week, on Aug. 27, the Congressional Budget Office will send out its bean-counters with a result the Democrats hope will put Bushís first budget exactly where they want it: In the red. But while the CBOís numbers may vary slightly from the OMBís, in leaky Washington itís a good bet that Mitch Danielsí accountants had the CBOís numbers in mind when they came up with that extra $4.3 billion last week.

    That leaves the Democratic leadership with the tax cut. Their best argument, of course, is that the tax cut, over its 10-year life, is a budget-buster, and they may yet turn out to be right. But budget fights happen one year at a time, and this fall, Democrats will have to do what Democrats have always done when Republicans try to give away their hard-earned tax receipts: Find "spending priorities" that Americans would have preferred to $78 billion in tax cuts for 2002, and convince them to take their remorse out on the Republicans. (The Dems donít have anything specific yet besides the Social Security surplus scare, but Dick Gephardt will be waving a list before long.)

    But that was a lot easier to do when the economic times werenít so tough. When the economy was booming under the silver-tongued, pain-feeling Clinton, Democrats saved their tax cuts for the targeted few, arguing that not everybody really needed them, and spread the rest around. Health care, Medicare, saving Social Security first — you name it, Clinton could sell it. And Americans could afford to be generous.

    But now wallets are thinner, and Bush is presenting a balanced, Social Security-preserving budget that includes Clinton-sized spending hikes for two areas that Bush knows the public loves: defense and education. Beyond that, goes the pitch, it all went back into the ailing economy, via the tax cut. Anything else — meaning, anything else that busts the budget — must be pork.

    A smaller federal government?

    Government belt-tightening, of course, is what the Republicans have been trying to sell voters for years, but when Clinton had the surpluses rolling in and everybody from K Street to Wall Street to Main Street was feeling flush, it looked like cold, cruel ideology next to Billís lofty empathies. Not to mention that Republicans, in their own way, have been prone to spend as much as Democrats when its been their turn at the trough. Now that Americans are doing a little belt-tightening of their own, they might finally be ready to demand that Washington join them.

    Of course, if the tax cuts donít help, and the economy is still in the tank in November 2002, the GOPís snug-fitting belt is likely to quickly settle around their necks.