Why Pocketbook Issues Captivate Washington

It's springtime in an election year, and Washington's fancy has turned to pocketbook issues.

Individual economic items - the gas tax, the minimum wage, pensions, even the price ranchers get for beef - have supplanted the overall budget as the fiscal focus of Congress and the White House, at least for now. One major reason: Presidential candidates who convince voters they'll make them better off gain a powerful electoral advantage. "It's the economy, stupid," was Bill Clinton's tag line in 1992, after all.

As an incumbent, President Clinton will likely need a more subtle economic message. So far the White House seems to have settled on: "Things are going great - but I feel your job anxiety."

Presumed GOP nominee Sen. Bob Dole (R) of Kansas, meanwhile, is struggling to find a way to take the fiscal offensive. His effort to reduce the gas tax has scored him some points, but many experts feel that the Senate majority leader has yet to find a way to articulate voter worries about their living standards.

"The economic issue has been tough for him," says Alan Heslop, a political scientist at Claremont McKenna College in California.

The Democratic effort to raise the minimum wage by 90 cents an hour might be judged the first shot in Washington's current micro-economic battle. Although such a hike has been a professed policy goal of the administration for years, neither the White House nor its congressional allies pushed the issue hard - until the last few weeks.

The Senate schedule has been thrown into turmoil as Senate minority leader Thomas Daschle gleefully tries to attach the widely popular minimum-wage change to every piece of pending legislation in sight. Nor is this the last such guerrilla attack planned. Once a minimum-wage vote occurs, as now seems likely, Democrats will likely start to promote legislation that would increase the portability of worker pensions.

Against this background the White House has been honing its overall economic position. On the one hand, administration officials eagerly try to claim credit for the overall general health of the economy. The deficit, unemployment, and inflation are down, while job growth and the gross domestic product are predicted to continue up. On the other hand, many Americans appear to feel left out of this general prosperity. Polls show widespread worries about job loss and stagnant wages.

"It's a complicated reality," said White House economic adviser Laura D'Andrea Tyson at a Monitor breakfast with reporters. "The anxiety is based on real factors."

A just-released report by the White House Council of Economic Advisers lays out the figures. On the positive side, most new jobs created in the US are good jobs, with two-thirds paying more than the minimum wage. The rate of job loss has slowed, and the percentage of US workers with more than one place of employment isn't going up. On the negative side, job losses that do occur are today more likely to be permanent. Layoffs are increasingly concentrated among white-collar workers, and those who are fired tend to suffer a permanent decrease in earnings.

Thus the administration's message so far attempts to straddle these factors, saying that while things are positive, perhaps America can do better. "We need to talk about the economy being in a sound situation ... but it's not sufficient," Ms. Tyson says.

One danger sign for the administration is that voters have been reluctant to credit him for the economy's up side. Polls tend to give him low marks for his handling of the economy, relative to other incumbents facing similar non-recessionary times.

Whether Senator Dole can swing the economy to his electoral advantage, however, is an open question. His effort to lower the federal gas tax has proved popular with voters and has blunted some of the Democrats' minimum-wage tactical gains. It has brought back taxation as an issue - a strategic goal of the Dole campaign.

But Dole may have a problem in the type of voter who's feeling economic worries. In the last 18 months, 1 in 7 workers has lost a job. Three more of those seven are worried about unemployment. But this slice of the electorate tends to be blue-collar workers who are natural Democrats.

To win, Dole may have to assume the mantle of solemn leadership in foreign policy and character issues. Events over the next few months may make these issues more salient. "I don't think Mr. Clinton can bask in the economic sunshine going all the way to November," says Mr. Heslop.