Pity the poor Democrats. They thought they had discovered the perfect issue: "fiscal discipline." By draping themselves in the mantle of fiscal rectitude, Democrats discovered they could oppose tax cuts without advocating any specific government spending -- thereby avoiding both the potentially controversial nature of any new outlay and the generic "Big Spender" label (as in "Democrats who just want to spend the taxpayers' money instead of letting them have some of it back"). Even better, with the invention of the "Social Security lockbox" -- which would wall off surplus revenues coming into the Social Security trust fund from the rest of the budget -- it became possible to present fiscal discipline as a way of protecting the very popular Social Security program from "raids" by tax cut-loving Republicans. Fiscal discipline, it seemed, could be the Democrats' political Holy Grail.
Never mind, of course, that protecting Social Security in this fashion doesnothing to make the program more solvent: The trust fund gets the same governmentbonds whether the surplus revenues are spent buying back government debt,supporting tax cuts, or funding new social programs. Never mind that the solvency"crisis" of Social Security is itself wildly exaggerated. And never mind thatevery dollar directed to the lockbox or to debt reduction is a dollar that cannotbe spent on worthwhile social programs like a prescription-drug benefit oruniversal preschool. As a no-big-spenders-here cudgel to be used againstRepublican tax cuts -- and as a way of capitalizing on the political popularityof Social Security -- fiscal discipline's undeniable political benefits provedsimply too seductive for Democrats to resist. Forgoing important social programswas worthwhile, Democrats calculated, as long as preaching fiscal disciplinecontinued to benefit the party politically.
But what if it stops doing so? Though there always have been reasons to doubtthe efficacy of the fiscal-discipline strategy as a political mobilizer -- forone thing, the public typically ranks debt reduction quite low in any list ofpolicy goals -- there are especially good reasons to doubt its efficacy now."This year," wrote Charlie Cook in the January 19 issue of the NationalJournal, "the federal budget will be back in the red. And while Democrats will be mightily trying to blame President Bush and his tax cuts, most Americans don't seem to be buying that explanation, and don't seem to even care about the deficit."
Cook's right. The party has finally succeeded in becoming the undisputed partyof fiscal discipline -- and nobody cares! Circumstances clearly have made theirfavorite political strategy outdated -- as mainstream political commentators likeCook have begun to note -- but the Democrats are in denial. Why else would theycontinue to emphasize an issue that has so little political traction? How else toexplain their hysterical attempts to assert the imminent meltdown of SocialSecurity if the lockbox is discarded and some of that money is actually spent?
It's time for the Democrats to accept that times have changedand move on. That doesn't mean giving up on Social Security, which is critical,but it does mean giving up the single-minded focus on fiscal discipline and thesanctity of the trust fund. Not only are these tactics not working politically,but they effectively preclude public spending on worthwhile (and popularlydesired) Democratic programs like -- to list just a few examples -- aprescription-drug benefit, expanded coverage for the uninsured, increasedsupport for preschool and after-school programs, and universal retirementaccounts. There just isn't enough money to both appear fiscally abstemious anddeliver these programs. Meanwhile, the Republicans haven't let their fiscalrectitude of yesteryear stand in the way of the spending they like (namely, moretax cuts). Why should the Democrats?
Here's the important question: Can the Democrats win a fair fight with theRepublicans over what's a better use of the public's money (more spending onpopular programs or more tax cuts)? Easily. Recent poll results show that theGOP's emphasis on tax cuts is stunningly out of step with the public; ideas fortargeted spending, on the other hand, are well received.
The January NBC/Wall Street Journal poll showed that while 88 percent of the public favored a proposal to provide prescription drug benefits to senior citizens and 82 percent favored a proposal to provide assistance to people with no health insurance, just 41 percent favored a proposal to provide tax cuts to businesses. A February Pew Research poll showed that 69 percent of respondents favored more spending on health care and 73 percent favored more spending on education -- a higher percentage in both cases than the percentage of those favoring more spending on military defense (60 percent) and even antiterrorism defenses in the United States (63 percent). Given the current context, that's striking.
What should the Democrats do? Bush's new 10-year budget proposesto spend an additional $600 billion or so on more tax cuts. These can be opposedeffectively on the grounds that the money could be better spent elsewhere. Butthere's no need to stop there; no one should treat the $1.3 trillion in tax cutsalready passed as sacrosanct.
Poll after poll shows that the public is willing to postpone or roll backsome of these already legislated tax cuts if the revenue were used for somethingelse they find worthwhile (and that's without specifying the likely scenario thatonly those with over $130,000 in income would find their tax cuts deferred by the postponement). A Zogby poll in early February, for example, revealed 71percent of the public favoring a tax cut rollback if that money were used for aprescription-drug program for seniors; 69 percent in favor if it were used for education; and 63 percent in favor if it were used for environmental protection.Similarly, an Ipsos-Reid poll in mid-February had 76 percent favoring tax cutpostponement to provide prescription drugs for the elderly; 72 percent favoringit to improve education; and 68 percent favoring it to provide unemploymentbenefits to displaced American workers.
It's not even necessary for Democrats to argue against the Bush tax cuts headon. Rather, the best strategy might be to wait until Republicans object that aDemocratic proposal (say, a fully funded prescription-drug benefit) just can't befit into the budget -- and then bring up postponing the tax cut. If the choice is presented as a Democratic plan to fully fund a prescription-drug benefit through Medicare versus a Republican plan to fully fund tax cuts for the affluent, even today's Democrats could easily prevail.
It will be tempting for Democrats just to stay the course. The fiscaldiscipline strategy has worked for them before. And the idea of protecting theSocial Security trust fund still polls very well. But the Republicans alreadyhave broken open the lockbox -- it's a fait accompli -- and the public didn'tseem to care. Wouldn't it be better for Democrats to advocate concrete programsthat people want rather than an accounting abstraction? Perhaps the public isready for the new tax-and-spend Democrats -- the party of prudent taxation and targeted spending. Given how well the green-eyeshade approach is working, it seems worth a try.
