Economic Troubles Tax Bush Campaign

THE $64,000 political question: How can George Bush be beaten in 1992?

Six months ago, even Democrats would not give a plugged nickel for their chances. But increasingly, as Mr. Bush's popularity continues to dip along with the economy, the Democratic nomination looks more like a pot of silver, if not yet gold.

The president has fought back. He insists his top priority is "jobs, jobs, jobs." He vows to bring the same kind of vigor to battling economic problems that he did to fighting the war with Iraqi President Saddam Hussein.

But does the president have it right? Are jobs really the issue?

Surprisingly, pollsters say, "No." Other recessions have been about jobs. This one is about money. There's an important difference. And that may be giving Democrats an opportunity to pull off a rare feat: ousting an incumbent president.

Listen to Democratic pollster Celinda Lake talk about the current recession, which has struck particularly hard in New Hampshire, site of the nation's first presidential primary on Feb. 18:

"It's really interesting because the economy used to be about jobs. Can you get a job? Is it a job that's better for your kids? Now [the economic issue] is about incomes, it's about taxes, it's about prices, it's about the cost of college educations."

As Ms. Lake notes, "Eighty percent of Americans aren't worried about losing their jobs." But even those who have jobs "are desperately worried about meeting their bills," particularly medical expenses.

Today it is not uncommon to find steel-mill or factory workers who lost their jobs during the past three years because of foreign competition. Many used to earn $20 an hour or more. They and their families had health insurance, dental insurance, and one-month paid vacations. Now they often must work in restaurants, hotels, or at unskilled jobs. They make $5 to $10 an hour. They have no health insurance, no dental insurance, only two weeks vacation, and no retirement benefits. They have jobs, but they and

their families feel financially threatened.

The "money" question is one reason Democrats cite for Sen. Harris Wofford's upset victory over Republican Dick Thornburgh in November's United States Senate election in Pennsylvania. Mr. Thornburgh, a former attorney general and friend of the president, was supposed to win that race handily.

Instead, Senator Wofford used the rapidly escalating cost of health care to show that Democrats, not Republicans, will address the most urgent problems facing American families. Because of business failures and the loss of high-paying jobs, one-third of Pennsylvanians no longer have health-care coverage.

Bush clearly faces a challenge greater than Ronald Reagan did during the 1982 economic downturn. When Mr. Reagan got into that "jobs" recession, he was able to urge Americans to stay the course. They did, and soon the economy turned around.

This time, American patience is wearing thin. Many citizens don't think staying the course will solve the nation's current crisis. They see the best jobs going abroad, or to Mexico, and their financial security going out of the country with them.

The latest survey from Public Opinion Strategies, a Republican firm, finds that 60 percent of the voters want a "major overhaul and change in the programs and policies of the Bush administration." Just 34 percent support all or some of the current policies.

This still doesn't assure Democrats of success. There is concern among Democratic strategists, like economist Robert Kuttner and consultant Tubby Harrison, that the party's leaders will miss the point.

Mr. Kuttner, writing in a liberal journal, "The American Prospect," says Democrats can score best by turning their fire not at the current recession, but at Americans' steady decline in living standards.

JUST look at the record of the past 10 years, a decade Mr. Kuttner says was filled with "wrong-headed" policies. During those years, the national debt has swelled to more than $3 trillion (in mid-January, it was officially $3,786,953,000,000). New debt is piling up at the rate of nearly $1 billion a day. The banking structure is being propped up only with billions of dollars of taxpayer money. Commercial real estate values have plunged. The better blue-collar jobs, such as autos, steel, and electronics, are being exported. Millions have lost health insurance. Homelessness is rising. Medicaid and welfare costs are ballooning. And public confidence in government, which might fix the mess, has fallen sharply.

Kuttner says there are three things the nation must do. First, halt the long-term decline in the nation's economy. Second, renew the nation's ability to compete economically. Third, defend middle-class living standards.

Mr. Harrison warns in a similar way that Democrats must look beyond short-term gains in the current recession to build long-term prosperity for the nation.

The ordinary Democratic response to the current crisis would be to say Bush is bad on the economy, and then suggest, "Let's extend unemployment benefits, student loans, national health insurance, etc., which is fine," but not enough, Harrison says.

"What Democrats are doing is easing the pain, rather than treating the illness. And eventually it catches up with you because we can't tax our way out of recessions, or tax our way into prosperity forever for the future," he says.

Harrison wants to see a Democratic president who, like Harry Truman, would bang heads when necessary to get new jobs created in the US. He wants incentives to see that American businesses invest in American jobs, not export them as Ford did with its new auto factory in Mexico.

Harrison wants to push US firms to develop and manufacture better American products, and to reward companies that do. He would go further. When American companies send jobs abroad, he would urge that government money be invested in competing companies that keep the jobs at home.

As he puts it, it is our money, our country, and if American companies won't invest here, then "we'll do it ourselves."

While Harrison praises Democrats like Paul Tsongas for raising economic issues, he says Mr. Tsongas and others too often act like Paul Revere, sounding a warning but failing to offer specific proposals to solve America's long-term problems.

If a Democrat comes up with an action-plan that he can sell to America, Harrison and others believe that will be the surest way to make George Bush a one-term president. Parts one and two of this series ran Jan. 27 and Jan. 28.