Why a strong economy is no GOP asset

Of all the problems Republicans face heading into the fall political season, one of the most exasperating is the economy.

In many ways, they say, these are the best of times: Unemployment is at 4.7 percent, lower than the averages of the 1970s, '80s, and '90s. The economy is showing strong, consistent growth, without significant inflation. And the stock market is roaring along.

Yet many Americans just aren't impressed. A majority tell pollsters they trust the Demo- crats more than the GOP to handle the economy. When asked in an open-ended question which is the most important problem facing the country today, respondents to a recent CBS News poll named "economy/jobs" second after the Iraq war - and ahead of immigration, terrorism, and healthcare.

"First, there's general concern about globalization and its effect on American manufacturing jobs," says GOP pollster Whit Ayres. "We see low unemployment, but the headlines are dominated by the thousands being laid off by General Motors and Ford."

Underlying that, he adds, is concern about healthcare and being able to afford and keep health insurance if something happens to one's job. The latest run-up in gasoline prices also doesn't help the Republican-led government in Washington, even if there's little it can do in the short term about that.

Independent pollster John Zogby sees the public's skepticism over the economy as part of a larger picture of overall concern over the direction of the nation and a president struggling to recapture Americans' confidence. "It's not just the economy," he says. "If we were at peace or the war was going well or there was confidence in other areas, then the economic news could be bolstered and people could begin to feel better."

In order to understand the full picture on public concerns about the economy, he says, a raft of "secondary indicators" must be factored in: health benefits, pensions, gasoline prices, as well as 401(k)s and stock portfolios.

Even though stocks are strong again, memories of a market dive in the not-too-distant past remain fresh. Mr. Zogby sees a 9/11 effect in people's thinking, not just about the stock market but about other factors close to home, such as safety and security - a concern that something terrible could happen again.

Iraq is also dragging down overall confidence, says Daniel Mitchell, an economist at the Heritage Foundation, a conservative think tank in Washington. And he blames Republican politicians for "being so fiscally irresponsible" on the spending side of the budget. "Even if the tax cuts have helped, between the bridge to nowhere and now the railroad to nowhere people are probably figuring it's only a matter of time before the bills come due and this all falls apart," he says.

For months, the Republicans have held a losing hand on the array of issues facing the nation, and even on their strongest issue, terrorism, often the best they can do is muster a tie with the Democrats in polls. But on the economy, at least, the White House is hopeful that better use of the bully pulpit can boost public confidence.

"The advantage the White House has on this issue, which they don't on other issues, is the reality really is good," says Mr. Ayres. "The truth may not set them free, but it might improve public perception. So someone with an ability to articulate the good economic news in a compelling and memorable way day after day after day could have an effect on public perception."

In a roundtable discussion with a group of mostly small-business people Monday in Sterling, Va., President Bush acknowledged that "Americans need to keep hearing" his message on the economy. On that day, Tax Day, he stressed his push in Congress to make tax cuts permanent, and asked some at the table to reveal how much they had already saved from tax cuts.

Sitting nearby was Treasury Secretary John Snow, who reinforced the message. What remained unstated was the open secret that the White House is shopping around for a new Treasury secretary, someone who can bring a new voice to the economy-is-strong message - probably someone from the world of economics or finance.

Meanwhile, debate rages among Democrats over how best to take advantage of public disillusionment with Republican government, including the economy. Are bumper stickers saying "Had Enough?" enough, or does the party really need a multipart plan to persuade voters to toss out their incumbent Republican members of Congress? Various Democrats - from Sen. Hillary Rodman Clinton of New York to Clinton-era Treasury Secretary Robert Rubin - are launching strategies to spark debate.

In a recent speech in Chicago, Senator Clinton focused on the middle class, arguing that "tax cuts are not the cure-all for everything that ails the American economy." Secretary Rubin, in his newly launched initiative called the Hamilton Project, has centered concerns on growing income inequality in the US.

At a Monitor breakfast on Wednesday, Democratic National Committee chair Howard Dean said "the problem with the president's, with the Republicans' economy is that it's good for their base - 20 percent of the public - but it's not so good for 80 percent of the public."