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Clinton's Policies Have FDR Rolling in His Grave : Presidency: The deficit obsession and higher taxes for the 'working rich' have brought Republicans back to life. Old Democratic lessons forgotten.

August 22, 1993|Kevin Phillips | Kevin Phillips, publisher of the American Political Report, is the author of "The Politics of Rich and Poor." His most recent book is "Boiling Point: Republicans, Democrats and the Decline of Middle-Class Prosperity" (Random House)

WASHINGTON — Those who have seen parallels between Jimmy Carter and Bill Clinton should note another: Not since the Plains, Ga., peanut farmer took the near-corpse of the post-Watergate GOP, gave it adrenaline and pointed it toward victory over his own failed Administration in 1980 has a Democratic President done so much to revitalize a stricken opposition. The Republican Party, already sitting up and taking nourishment from Clinton's unpopularity, could be headed for victories nobody would have imagined in the gloom of last Thanksgiving and Christmas.

The extent to which Clinton has abandoned old Democratic victory formulas must have Franklin D. Roosevelt rolling over in his grave. FDR, who was elected in mid-Depression 1932 despite archaic talk about balanced budgets but who then rose above his campaign rhetoric to stimulate the economy and dispel the public's fear, has now seen fellow Democrat Clinton emerge as a kind of Roosevelt-in-reverse. The Ozark Kid, elected on a platform of economic stimulus, broke his campaign promises to embrace higher taxes in the name of deficit reduction, thereby rekindling voter economic fears that his election had briefly eased. Since Congress passed Clinton's economic program, including a reversal of Roosevelt fairness on taxes, consumer confidence has plummeted in three major surveys.

Clinton may even be on his way to grabbing the mantle of Herbert Hoover, carried off the field by George Bush last year after helping New England, New York, California and a few other states stage the late-20th Century's closest re-enactment of the Great Depression. The man from Hope hasn't quite gone that far yet, but there's no doubt that Clintonomics will be reducing economic growth over the next few years, and the surge in the bond market, which feeds on bad news, reflects increased belief that a Clinton recession is coming.

During the Reagan and Bush years, the economy regularly weakened in time to hurt the GOP in the midterm elections of 1982, 1986 and 1990. Now, Clinton could be about to hang the same midterm lead weights on congressional Democrats. GOP hopes are further whetted by the extraordinary disarray in the ranks of the Democratic leadership of the House of Representatives: Ways & Means Committee Chairman Dan Rostenkowski is apparently close to being indicted; Majority Leader Richard A. Gephardt has just broken with the Administration on free trade with Mexico and will oppose the White House's North American Free Trade Agreement, and rumors about the departure of lackluster Speaker Tom S. Foley have several key Democrats already maneuvering to replace him.

The upshot is that the Republicans may be positioned for serious midterm congressional gains in 1994, and the odds are that the GOP and Perot votes together will total well above 50% in 1996. So, although Republican gains next year aren't likely to give the GOP control of either house of Congress, the party could come close in the Senate, and it's conceivable that the Republican contingent in the House will rise above the 200 mark for the first time since the 1950s.

If that happens, Clinton won't be able to pass anything resembling a liberal Democratic agenda. All his references to having "beaten gridlock" will turn into sitcom fodder, even if the GOP, too, winds up embarrassed by lack of achievement.

Neither of the two issues coming before Congress in September--health reform and NAFTA--look like they'll do much to change the political equation. So far, Clinton is being cautious on health care, avoiding the heavy-handed government role and payroll taxes he seemed to be pointing toward several months ago. His advisers are also talking about protecting small business and phasing in the program over five to seven years to avoid any major economic dislocations. That won't give the Republicans the sort of tax-and-spend arguments they had with Clinton's economic program, unless there is a recession next year. In that case, Clinton would have to be doubly careful of the effects his health-reform demands might have on small business and on climbing budget deficits.

NAFTA, by contrast, will be a three-way chess game among the Democrats, the Republicans and Ross Perot. The critical tight vote should come in the House, where about two-thirds of the Republicans will vote for the agreement, and as many as two-thirds of the divided Democrats could vote against. Clinton, knowing he could lose NAFTA, doesn't want to look like he places too much priority on something that was, after all, largely a Bush Administration blueprint on behalf of the United States and Mexican business and financial communities. The Republicans, by contrast, sense another opportunity. They want to: a) display a pseudo-bipartisanship in rallying behind NAFTA to rebut charges of always being negative, while b) simultaneously trying to exploit the free-trade debate to maximize the internal damage it inflicts within the Democratic Party.

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