How the Dems Can Get Back into the Tax-Cut Game


By Richard S. Dunham To understand the political predicament faced by Democrats on the issue of tax cuts, just look at the tone of the debate in the week since President George W. Bush unveiled his $1.6 trillion package. As he barnstorms across America's heartland, Bush -- scion of one of America's most patrician families -- is coming off as the plain-spoken defender of the average working stiff.

Meanwhile, Democratic leaders sound like carpers and whiners. House Minority Leader Richard A. Gephardt (D-Mo.) says the $1.6 trillion plan is "too good to be true" and too big to be fiscally responsible. Senate Minority Leader Tom Daschle (D-S.D.) decries its "funny math." Representative Charles Rangel (D-N.Y.), the top Democrat on the House tax-writing committee, says Republicans aren't playing fair and square on Capitol Hill. And AFL-CIO President John Sweeney says the Bush plan is a big payoff to fat-cat contributors.

What's the problem here? The Democrats are on the defensive, and they sound like it. They're not for something. They just appear to be against a plan the President insists will rescue the economy and help people pay off their overdue credit-card bills. Without the bully pulpit and a smooth persuader such as Bill Clinton in the White House, Democrats are struggling to find a voice amid a cacophony of squeals.

In essence, Bush is promising the sun and the moon, and Democrats are complaining that the moon is too far away and too costly to reach. Democrats may well have facts and figures on their side. But Bush has the imagery. And a little imagery can go a long way in the world of politics.

DEMS' DILEMMA. Just listen to the President's case for a $1.6 trillion tax cut. He tells people he'll return "the people's money" to the people. He argues that the federal surplus exists because "taxes are too high and government is charging more than it needs." If Congress doesn't cut taxes, it'll fritter away the surplus in an orgy of pork-barrel spending. (In America, who doesn't believe that to be true in their bones?)

"In my plan," Bush declares, "no one is targeted in, or targeted out.... Everyone who pays income taxes will get tax relief." An average family with two kids will get $2,000 back from Uncle Sam. Sounds good, huh? How many people want to say "no" to free money? Especially when the other side isn't offering any.

So what should Democrats do? For one thing, they should decide what they're in favor of. The Democratic Leadership Council began that process on Mar. 1. The centrist group endorsed a $700 billion cut that combines one element of the Bush plan (doubling the $500 tax credit per child) with a favorite idea of liberal Democrats (a tax credit to offset some of the burden that the regressive Social Security payroll tax places on lower-paid workers). It'll be tougher for congressional Democrats, who cover the political spectrum from socialists to the far right, to reach consensus on a legislative alternative. But they have no other choice but defeat.

BURN THE RICH. Here's what any Democratic plan must do to be politically credible: It must give real tax relief to every working family. Al Gore's targeted cuts are kaput. Democrats must give average working stiffs almost as much as the Republicans are promising. They just don't need to give the superrich enough money to buy a new Mercedes.

The Democrats can't let the debate be drawn between pro-tax-cut Republicans and anti-tax-cut Democrats. They need to frame the debate as fiscally responsible relief for every hard-working man and woman in America vs. a budget-busting, ultra-expensive plan tilted to the rich. That's a debate the Democrats have a chance of winning.

Meanwhile, Bush goes to Atlanta, Little Rock, Pittsburgh, and Cedar Rapids, trotting out "typical" families to show the country how his plan will help them. Democrats need to match Bush, family for family. Then they could roll out one of their own senators, freshman Jon Corzine of New Jersey, to explain how, as a Wall Street multimillionaire, he'd make gobs more money under the Bush plan -- except that the plan is a terrible idea that mostly benefits rich people like himself. That's a sound bite that sounds good for Democrats.

JUST TOO BIG? And once the Democrats have a plan that helps average taxpayers, they can gin up the old, reliable Social Security scare machine. They can warn Americans that Bush's costly cuts would either jeopardize oldsters' benefits or risk plunging the nation into another round of megadeficits. It's a tired old saw, but it has worked again and again.

Republican pollster Frank Luntz notes that Bush now has a huge edge in the tax-cut debate, but the plan is vulnerable to attacks on its size. If Democrats frame the issue as a debate over a $1.6 trillion tax cut, "they win," says Luntz. There's evidence to back up that assertion: When the Gallup Poll asked Americans who watched the President's Feb. 27 speech to Congress whether they favored his tax cut, 79% said yes. However, when Zogby International asked about the huge price tag in a Feb. 27 poll, just 51% of voters said they favored a $1.6 trillion cut.

Played right, Democrats can win this debate. But to win the debate, they have to get into the game. Dunham is White House correspondent for BusinessWeek

Editor's Note: In addition to Dunham's regular every-Monday column, Washington Watch will now appear every Tuesday as well, written by Howard Gleckman and guest writers from BusinessWeek's Washington bureau


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