No honeymoon in Las Vegas

Insight on the News, Sept 9, 2002 by Jennifer G. Hickey

Some see the glass as half full, others as half empty. Some remember Elvis as the svelte, pelvis-thrusting, rock balladeer who transformed popular music. Others recall only the Elvis who wouldn't have made the weight to fly Southwest Airlines to Las Vegas. Such differences of perspective were evident as Republicans and Democrats left the building for the August recess.

As President George W. Bush gathered average and not-so-average Americans to talk economic and fiscal policy in Waco, Texas, exaggerated echoes of outrage were heard across the country from Democrats who vented about "politics" and "dog-and-pony shows." In Las Vegas for a Democratic National Committee (DNC) conference, DNC Chairman Terence McAuliffe called attention to himself by declaring that Bush had broken faith with bipartisanship by citing the terrorist attacks of Sept. 11 and their aftermath as contributing to the nation's flulike fiscal discomfort.

Arguing a theory of market economics more reminiscent of old E.F. Hutton ads than of philosophies of either John Maynard Keynes or Milton Friedman, McAuliffe contended Bush had "tried to talk the markets up and down in an effort to manipulate the economy to peak and crest at politically convenient times" and, having failed, had resorted to tasteless tactics by capitalizing on the war on terror. To roaring applause, McAuliffe told the party faithful: "All Americans trusted that President Bush would never exploit the national crisis. ... [But he has] used [last/September's tragedy to explain away last August's deficits. And then he cynically made 9/11 the cornerstone of the Republican 2002 election strategy." No explanation was given as to why the Bush detailing of the economic reality is exploitative or why highlighting presidential leadership somehow is unseemly. Where was McAuliffe in 1996?

Outside the real-life vacuum of official Washington, the president attempted to bolster confidence in the economy and sell his administration's policies. Not everyone was biting. USA Today described those in attendance at his economic forum as "a bit of a Who's Who of corporate America," while Lawrence Chimerine, a senior adviser with DRI-McGraw Hill, predicted the forum would be nothing more than "a large Phil Donahue Show." An administration official defended the effort, simply explaining that the idea was to "help build consensus for what he wants to do."

Noting the predominance of party members among the president's summiteers, one newspaper added up more than $4 million in soft money and $300,000 in hard dollars that had been donated to the party's national committee by those in attendance. Of course, that also was how Bill Clinton's Little Rock, Ark., economic forum was described in December 1992. Ten years later, Democrats cast aspersions, Republicans recast history and the press finally gets it right--both sides engage in simulated summiteering when it suits their purpose.

The difference was in what ideas emerged. The Little Rock summit resulted in proposals to counter recession by raising taxes, including a gas tax, balanced by calls for speeding up the pace of government spending. The forum deep in the heart of Texas produced calls for fiscal restraint but with only lukewarm support for further changes in the tax structure. No surprises either time.

The tepid support at Waco for easing the heavy tax burden on the investor class does not seem likely to ignite wildfire support for policies to do such a thing in an election year in which Democrats are all but demanding that the body of Adam Smith be dug up and ridden out of town on a rail. Having expended enormous political capital on the Bush tax cut, Sen. Charles Grassley (R-Iowa), the ranking member on the Senate Finance Committee, said any further reform of the tax structure now is dead given the current political environment and Senate schedule constraints.

Yet no one but the most partisan Democrats seems to want actually to give back the scheduled tax cuts. Even as such Democrats continue trying to assign blame for economic sluggishness to the alleged burden of the "tax cut for the wealthiest 1 percent" of Americans, it is doubtful that even Sen. Ted Kennedy (D-Mass.) will take the initiative actually to introduce such a proposal. Only Republicans would benefit politically from such a move.

On the spending side, Bush announced that $5.1 billion of additional spending included in a $28.9 billion fiscal year 2003 supplemental appropriations measure passed by Congress would not be released, criticizing profligate spenders for failing to demonstrate fiscal discipline. "If Congress can't show spending restraint," Bush declared, "I will enforce spending restraint."

Central to the issue is a provision inserted by Senate appropriators pertaining to the "contingency emergency funding" that required Bush either to approve all or none of the $5.1 billion. Although containing $417 million for veterans' health care, $50 million for forest-fire response and recovery and funding to study the health of Ground Zero workers, it also dedicated $2 million for a project to store worms in alcohol and other unrelated spending issues. Senate Appropriations Committee Chairman Robert Byrd (D-W.Va.), an ardent earmarker, declared that "at this White House, it seems that politics trumps everything and, in this case, the price is the safety of the American people."