Politics & Policy

On Daschle’s Deaf Ears

The Senate Democratic Leader's one-man stand.

Reprising Al Gore’s campaign mantra of bashing rich people and attacking business, Senate Democratic Leader Tom Daschle has managed a one-man stand to kill the stimulus package designed to help the nation move out of recession. But for the Daschle Democrats, it hasn’t worked any better than it did for Al Gore (who, by the way, has probably picked the worst time in American history to grow a beard).

While arguing for the absolute minimum in tax cuts, Daschle & Co. have called for larger unemployment-compensation benefits and an expanded health-care package that closely resembles the Clinton plan to nationalize health care. That plan was defeated seven years ago, by the way. America and most of its elected officials had no stomach for it.

None of these class-warfare arguments have paid off. In fact, recent opinion polls strongly suggest that Daschle’s economic strategy may have badly hurt congressional Democrats.

A newly minted USA Today/CNN/Gallup poll shows that 44% of Americans prefer Republican economic policies to only 35% in favor of Democratic plans. If the 2002 elections were held today, 48% of registered voters say they would pull for the GOP congressional candidate, with 43% going for the Democratic one. That’s a dramatic change from last month when the parties were deadlocked.

And the news gets even worse for the Daschle Democrats. The latest Wall Street Journal/NBC News poll conducted by Peter Hart and Robert Teeter asked Americans who they think has the better approach to pulling the country out of recession. President Bush scored 46% and the Democrats in Congress a meager 25%. More importantly, when asked which option would stimulate the economy and pull the country out of recession, 59% said Congress should give tax cuts to businesses. Only 29% percent said they should spend on unemployment benefits.

In the final moments of the stimulus-package debate, the two most contentious issues were health-care benefits to the unemployed and the termination of the alternative minimum tax for businesses. On health care, the Democrats insisted that expanded government subsidies be paid through employers for the temporary Cobra plan, now available to the jobless. This proposal may look familiar: It’s a smaller version of the old Clintoncare single-payer approach, which would have put the entire health-care sector under government control.

As for cutting the alternative minimum tax, Daschle & Co. repeatedly argued that this would help only the largest firms, such as IBM, General Motors, or Ford. Yet, in actuality, a full 23,000 businesses across the land — large, medium, and small — would have been off the hook from this onerous tax that impacts firms whether they are making money or not.

Republicans, on the other hand, have put a more current American way of thinking behind their stimulus plans. Led by Ways and Means chairman Bill Thomas (R., Ca.), they have insisted on a consumer-choice approach to emergency health care, where tax credits and vouchers would be paid directly to individuals who could then shop around for the best health-insurance deal on the market. This consumer-choice approach would provide greater competition and lower costs, saving both the federal budget and families a considerable amount.

Essentially, the original Bush approach to accelerate income-tax cuts for all Americans would have truly provided anti-recession, economic-growth incentives. Remember that within that income-tax spectrum, nearly one-third of filers are small business owners. That group is the most potent job-creating machine we have.

Also, the Bush plan for a 30% cash-bonus for immediate expensing of business depreciation write-offs would have significantly improved the outlook for the technology sector. It’s no coincidence that the Nasdaq stock index has sagged badly on the news that the stimulus package has been defeated.

Congressional Democrats are too busy bashing upper-income tax payers and businesses to recognize any of this. And they are out of step with the rest of the country, where nearly all working Americans have a vested interest in the health of business.

For example, of roughly 130 million job holders in the country, 84% — or 110 million — work for private-sector businesses. Then there’s the rapidly growing investor class where roughly 100 million people have their retirement accounts invested in the stock of private businesses. These folks have a strong incentive to see the firms they are invested in succeed profitably. Both their livelihood and their future golden-year retirement depends on it.

The Daschle Democrats see an America that is a welfare society, or an entitlement society. Yet it has become an ownership nation based on private free enterprise. People prefer to make their own choices, be it health-care insurance, 401(k)-type defined contribution plans, or schooling decisions for their children. Spoon-fed mandates from the federal government are out of favor. Most of all, the vast proportion of people today recognize that it is businesses that create jobs — not government entitlements or mandates.

So while they have succeeded in thwarting President Bush’s tax-cut plans to promote economic recovery, the Daschle Democrats are likely to pay a heavy price in next year’s midterm elections.


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