Economy alters political weather

From tax cuts to environmental protections, an economy in flux changes the calculus of policy battles.

After years of dealing with a blue-sky fiscal era, Washington is suddenly worried about the return of the politics of hard times. This doesn't mean the US itself is about to break out the bottles of red ink. So far, the government surplus is projected to remain strong for years to come.

But an unsettled economy is unsettling voters - and thus, inevitably, politicians too. Prospects for everything from George W. Bush's tax cut to his budget plan and beyond are changing like the weather on a blustery day, as Republicans and Democrats compete to see which party can appear to do the most to respond to recession concerns.

"In politics, you always want to get out in front of any particular problem," says Dennis Goldford, chairman of the political science department at Drake University in Des Moines, Iowa.

The clearest example of this new dynamic is the current partisan sparring over the timing of tax cuts.

Senate Democrats are almost gleeful over what they think is the cleverness of their proposal for a one-off $60 billion tax rebate for 2001. Their thinking goes like this: The Bush administration has long argued that economic weakness is a big reason why the nation needs tax relief now. That means the White House can hardly oppose the rebate - even if it siphons away support for Mr. Bush's much more expensive 10-year rate-cut plan.

Maybe so. But Democrats have gotten into trouble when trying to throw the GOP into a tax-cut briar patch before.

In 1980, Democratic counteroffers to Ronald Reagan's tax plan resulted in the final package becoming bigger. That could happen again - Bush has said he will support retroactive tax relief, even as he continues to insist that economic conditions warrant passage of his more expansive plan.

"Part of building confidence in our economy is [to] not only give consumers a boost, but to have a plan that reduces rates for the long term, so that people who make investments ... will have certainty," said Bush at a press conference last week.

Shifting on environment

Tax cuts aren't the only subject where economic uncertainty has changed the tenor of the debate, however. Take the environment.

Bush has defended his reversal of his campaign promise to move toward limits on carbon-dioxide emissions by saying, among other things, that rising energy costs have changed the situation since November.

"We are now in an energy crisis," Bush told reporters at last week's briefing-room appearance.

And references to possible hard times have even cropped up in carping about congressional procedure. With debate on the president's budget coming in the Senate, minority leader Tom Daschle (D) of South Dakota has complained that his party is being kept in the dark about both budget details and Republican plans for the debate's timing.

"I don't know of anything that has greater ramifications for our country and for our economy ... than that debate," said Senator Daschle last Thursday.

But in their references to a slump in the economy, both parties risk striking a tone that could annoy voters.

Strictly speaking, voters are not automatically put off by politicians who sound an alarm about national problems, say some analysts. The reaction is all in how they ring the bell.

In this view, Jimmy Carter got in trouble not for pointing out that the US was in an energy crisis, but for implicitly blaming Americans' behavior as a major cause. Reagan prospered not by ignoring stagflation and big deficits, but by expounding his belief that the American people would naturally be able to overcome any obstacle in their path.

In politics, "you can either treat people as victims, or as heroes," says George Edwards, director of the Center for Presidential Studies at Texas A&M University in College Station. "Heroes is better."

The slump as a selling point

Using economic uncertainty as a selling point for a particular legislative agenda similarly carries some risk. That's because the US economy is so big and complex that its reaction to changes in fiscal policy can be unpredictable.

Consider this scenario: Bush's tax cut passes Congress and is signed into law - yet the economy continues to sink, and enters a prolonged recession. The administration might argue that without the tax cut, things would be worse. But voters might remember that the tax cut was sold as a solution to a problem that persisted anyway.

Politically, that scenario "is one of the worst things that could happen to him," says Thomas Mann, a governmental scholar at the Brookings Institution here.

Not that Bush or any other president should - or would - stand idly by without proposing solutions during an economic downturn. There's a reason the parties are competing to appear responsive to worries about the business cycle: Voters want them to.

And with the Republican margin of control in Congress so narrow, the smallest strategic mistake by either party heading into midterm elections could prove decisive.

"The elections of 2002 are centrally important," says Dr. Goldford of Drake. "They could determine the fate of the Bush presidency."

(c) Copyright 2001. The Christian Science Monitor