How Dems and the GOP Spin the Shrinking Surplus

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It’s the question du jour: Which party will be hurt the most by the reports of a shrinking federal surplus? U.S. Representatives and Senators, still scattered across the country for their August recess, are beginning to hear questions from constituents, many of whom are nervous: What might happen now that the pile of extra tax dollars isn't as huge as everyone originally thought? The politicians, not surprisingly, are busily crafting messages that blame the budget shortfall on the opposing party. What are the voters hearing? I decided to follow a Democrat and a Republican last week in hopes of finding out.

The Democrat

Maryland Democratic congressman Steny Hoyer launced his attack at a meeting last Wednesday morning in Edgwater, Maryland. The gathering of 50-odd seniors representing the 79,000 arthritis sufferers in Hoyer’s district was a great spot to drop an anti-GOP bombshell.

The news wasn’t good: At the beginning of the year, when the surplus was still abundant, Hoyer had proposed increasing federal research money for chronic diseases like arthritis by $350 million for fiscal year 2002. The Bush administration had cut the program by $175 million, but Hoyer hoped the Appropriations Committee, on which he serves, would use the surplus to restore some of that funding.

Suddenly, the huge surplus has vanished. Forget money for your aching joints, Hoyer told the seniors. The Office of Management and Budget was about to release figures revealing that with Bush's tax cut "we have spent the surplus as of today," he said. "It didn't take ten years to spend the surplus. It took 10 weeks, from the time the president signed the tax bill." Hoyer, who opposed Bush's large tax cut, knew this crowd would be disturbed by the new budget numbers coming out of Washington. The day before, Bush threw out his favorite tax-cut line to an audience in Independence, Mo.: "It's your money." Hoyer now had his own rejoinder that he tried out on the seniors: "Yeah, and it's their debt," he said, referring to the White House.

As the car sped to Hoyer’s next speaking engagement, an aide handed his boss an Associated Press story reporting figures the Office of Management and Budget had just released. The tax cut, coupled with a declining economy, had indeed soaked up practically the entire current surplus, as Democrats had warned. The non-Social Security surplus would be just $1 billion in 2001 and not much more than that in 2002. Over 10 years, the non-Social Security surplus would be just $575 billion, down $850 billion from the forecast in April.

The Republican

In Tennessee, Republican Bill Frist was testing out another line. The Senator sat down early last Thursday morning with about two-dozen cotton farmers at a University of Tennessee agricultural research center in Jackson, which is 85 miles northeast of Memphis. Tennessee grows 660,000 acres of cotton, but farmers are in trouble, they told Frist, who was taking notes. American cotton consumption is down, the farmers complained, cotton prices are dropping, a stronger dollar means U.S. cotton can’t compete overseas and cotton mills are closing.

The farmers' message: They need federal government help to shore up the industry at home and to level the playing field with competitors overseas. For forty minutes, the farmers recited bushels-full of statistics on crop yields and prices. They were hoping that the farm spending bill Congress was now considering would offer some relief. Finally a cotton farmer raised his hand to get to the bottom line. "My question is," he asked Frist, "if the surplus has gone away, are there going to be budget constraints so that it's difficult to pass this farm bill? Is the money there to pass this farm bill?" Even with the shrinking numbers, Frist reminded the farmers, the total surplus is still "huge."

"Every dollar coming in on Social Security will be spent on Social Security," he promised. "And every dollar coming in on Medicare will be spent on Medicare. The surplus can happen only if you keep the economy good." But for now, he admitted, "I wouldn't want to leave you with any sense that the money is absolutely going to be there for everything we want to do."

Back on the Hill

In September, Democrats will try to convince voters that dwindling tax receipts will inevitably force Republicans to raid the Social Security trust fund in order to pay for Bush's tax cut. "I don't know that it's really begun to resonate yet," Hoyer told me. "But I think it will. Republicans have gotten away with pledging not to spend the Social Security money, but they're already dipping into Medicare." Voters in Hoyer's district are beginning to stir, he believes. "I think people are going to get exercised about Social Security being at risk," he predicts. "And we're going to focus on it very closely."

Hoyer hopes that message will resonate. He's in the running to be his party’s House whip — and he'd much prefer it to be majority whip than minority whip. Right now, Republicans hold a slim lead in that chamber, but only a half dozen seats have to switch in 2002 to give Democrats control.

Republicans, on the other hand, hope their talking points are powerful enough to hold the House and take back the Senate, which the GOP lost to the Democrats last spring with the defection of Vermont Sen. Jim Jeffords.

With an eye on controlling both houses, Frist, who heads up the National Republican Senatorial Committee, the group in charge of returning the Senate to the GOP in 2002, closely monitors how folks in his state (and in other states with Republican senators) are reacting to the shrinking surplus. He knows it will be a favorite topic in attacks from across the aisle, but stands firm in his message. "The Democrats clearly are going to use it," he told me. "Our commitment is to balance the budget and to fuel the economy. The way you can do that is with the tax cut."