The Washington Times
I will admit to a certain personal fondness for the federal budget surplus. It is the source of an entirely unwarranted and perhaps even irrational feeling of virtue: my country, my surplus. The sentiment is precisely the opposite of the vague feeling of tawdriness, no less warranted and no more rational, that was generated by budget deficits. Of course, one doesn’t personally deserve credit for the surplus, or blame for the deficit, nor would any serious economist tell you that a deficit is always bad and a surplus is always good; hence the unwarranted and even irrational character of the feeling. But it is, I think, fairly widespread, if only in the most inchoate terms: surplus good, deficit bad.
The question now, as George W. Bush’s tax cut takes effect in a sluggish economy and as Democrats point to new budget numbers to accuse Mr. Bush of having “blown the surplus,” is whether the public’s affection for the surplus has the makings of a political issue capable of moving voters. It might || but not as such, I think. The political attack will have to become a lot sharper and more particular.
The first GOP line of defense is this: How much surplus is enough for you? The Democrats’ position has been the more, the better. The position has elements of disingenuousness to it, in that many Democrats would like to devote some of the money to additional federal spending. But one element is truly heartfelt: Most Democrats would unquestionably prefer to use every last nickel of the surplus to pay down the national debt rather than cut taxes in the manner Republicans favor. It’s a far better use of resources, in their view, to eliminate the debt than to cut taxes for the rich.
But this was, in essence, the fight over the Bush tax cut that played out in the spring. And at the end of the day, 12 Senate Democrats voted for the package.
While at the time, everyone knew that the tax cut would by definition result in a decline in surpluses, perhaps it would take the actuality of the drop before its political salience registered. Could be, but I doubt it, for the simple reason that the surplus isn’t gone; it’s just smaller.
Were the ink actually red, I think Democrats would have an easy time tagging Republicans with fiscal irresponsibility in a way that would hurt. As things stand, the surrogate for red ink is a puddle of black ink that is slightly smaller than it would otherwise have been. But if it’s true that black ink makes people feel good, it’s not obvious that more black ink makes them feel better. The GOP tax cut was based on the political calculation that less black isn’t the same as red.
There is, of course, a huge complication for Republicans here, namely, Social Security. Democrats will try to establish that the ink turns red not at the (far-off ) moment when total federal expenditures again exceed revenues, but at the moment revenues from Social Security taxes go toward general expenditures. We are perilously close to that moment, thanks to the tax cut and the economic doldrums. Democrats are looking forward to portraying Republicans as raiding Social Security, and Republicans are dreading the prospect.
Democrats have one other advantage here. It’s the extent to which GOP efforts to constrain federal spending in order to avoid crossing the Social Security surplus threshold can be portrayed as devastating and inhumane cuts in popular programs. As the first Republican Congress in the Clinton era learned, Democrats can be very effective when they target perceived GOP cuts in particular program areas: “Medicare, Medicaid, education and the environment,” was the mantra of 1995-96. Thus, while it would be a huge political problem for Republicans to be seen acquiescing in a dip into the Social Security surplus, there will also be significant political pain in avoiding doing so.
Mr. Bush got his tax cut || a great political victory on Capitol Hill, and one that met with majority public approval in polls. He will spend the rest of his time in office defending it against Democrats’ attempts to turn public opinion against it. That will be harder.