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The Budget Numbers That Could Hurt Bush

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At first glance, Karl Rove's decision to schedule the 2004 Republican convention for the first week of September in New York City looks like a masterful move. Roveís strategy for winning Bush a second term is to focus on domestic matters, particularly the economy, but never let voters forget the Presidentís performance as commander in chief. What could be better campaign imagery than Bush accepting his renomination in New York, where he found his footing after 9/11, a little over a week before that day's anniversary? But a smart Democratic challenger could turn this imagery on its head by asking: What has Bush done for New York lately? In fact, what has he done for any city?

New Yorkers have a short memory, and right now theyíre confronting not terrorists but higher taxes, higher subway fares and higher unemployment. Both New York City and State have billion dollar budget deficits. And it's not just New York that's in trouble. Virtually every state and city is facing budget gaps that they will have to raise taxes or cut services (or both) to cover. For many Americans, the federal tax cut will be offset by state and local governments raising rates to cover deficits and pay for growing costs like standardized testing of school kids and Homeland Security measures that the feds mandate but aren't funding.

Could this hurt Bush next November? That depends if any Democrats are able to use the issue to defeat him. If the Dems have any hope of beating a President with 70% approval ratings they need to accomplish two major goals: Prove they will be just as strong on overseas threats and stronger on domestic issues. But they canít just whine about Bushís handling of the economy and the dubious merits of his tax cuts; they need a plan of their own. Most Americans donít think the President can do much to change the economyís direction, but the Democrats can argue there is one arena where the federal government can take bold action: Bailing out the states.

For a former governor, Bush has been rather insensitive to the statesí and citiesí needs, mostly because he believes they dug themselves into this mess. Administration officials argue that during the boom years of the Ď90s, the governments expanded services to unsustainable levels. Theyíve got a point— state and city Democrats and Republicans alike cut taxes and increased spending at the same time. Now itís time for the hangover. Still, Bush shouldnít be so cocky on this subject. Heís also cutting taxes and raising spending, but he gets to run a deficit — a luxury states and cities donít have.

Mayors and governors canít hire the nine million-plus Americans currently out of work, but they can directly improve peopleís lives, more effectively than the feds can in many instances. First of all, those governments are responsible for managing the front lines of homeland security. At a time when many Americans fear another terrorist attack, itís odd that cities are laying off firefighters. If Bush doesn't provide one, a Democratic candidate who laid out an aggressive federal plan to figure out exactly what state and cities need and then provide the resources to do it would make many Americans sleep easier at night — and lift some of the weight of uncertainty off the economy.

The next problem the feds could help states with is Medicaid. The program is the fastest growing financial burden for states, with medical costs skyrocketing, particularly for prescription drugs. Most of the Democratic candidates have devised plans to try to cover people without health insurance, but none have looked at helping Medicaid. For a decade now, while Congress and the White House have been stalling on this issue, the states have been using Medicaid in innovative ways to expand coverage, increasing the number of citizens eligible for the program. But just when more people need it, 49 state governments have cut Medicaid is some way — 45 are limiting drug coverage, 27 are tightening eligibility rules, 25 are cutting benefits. Illinois Medicaid patients on Zoloft are now required to buy larger pills and cut them in half. A Democratic candidate could promise to push states to use Medicaid to cover more of the uninsured and to give them the money to do so.

Finally, the Democrats need to reclaim education. Bush successfully neutralized the Demsí traditional strength on the issue in 2000 by making improving schools a pillar of his compassionate conservatism. He quickly pushed the No Child Left Behind Act through Congress, but two years later, the states are furious about the law. Their beef? It imposes huge new testing requirements, and yet the President has not appropriated enough money to pay for it. States have to shell out an estimated $35 billion out of their own pockets. The resulting squeeze has forced 20 states to cut k-12 education programs. Schools in 100 districts in six states have gone to four-day weeks, and some districts in Oregon recently ended their school year three weeks early. Democrats should put forward a plan that gives schools standards to meet, but also gives them money to meets them.

When Bush goes to New York next Fall, Democrats are going to be hard pressed to counter all the patriotic emotions the Republicans will try to tap. But there is an effective counterattack: Memories wonít keep the nation safe or teach its children.

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