August 15, 2005

August 15, 2005 | Commentary on Legal Issues

Legislative Lowdown -- Week of August 15th

"We would like to take a moment," the editors of the Wall Street Journal wrote recently, "to pause and marvel at the U.S. economy." They cited a litany of truly positive economic achievements: More Americans are employed today then ever before, we enjoy one of the lowest rates of unemployment (5%) among developed nations, and the American economy has created 40 million new jobs over the last two decades, twice that of Europe and Japan combined.

Indeed, the New York Times characterized the July labor report as "robust" and cited the continued "brisk growth" of consumer spending, rising factory orders amid declining inventories (suggesting that further gains are on the way), and the remarkable 13 consecutive quarters of double-digit growth in aggregate corporate earnings. The Pentagon even "blames" our vibrant economy for the recent falloff in military recruiting.

Opinion polls, however, indicate that few Americans are marveling at our unrivaled prosperity. A majority disapprove of the President's handling of the economy. Most tellingly, they describe the economy as either stagnant or getting worse.

Liberals leave no stone unturned to further this false impression. In a recent report, for example, former Clinton pollster Stanley Greenberg paints a picture of the economy so grim it resembles the Carter era, with "employment concerns, stagnant wages, rising prices, and the crushing cost of health care seemingly hanging over every aspect of [most Americans'] lives."

Little wonder, then, that President Bush staged a series of events early this month designed to remind voters not only that our economy is strong, but that the onset of this surge coincided with the enactment of his pro-growth 2003 tax cuts.

On the positive side, he urged Congress to make the tax cuts-which expire gradually between now and 2011-permanent. Doing so would be an enormous achievement, but, alas, it appears beyond the reach of this Congress. (Less convincing was the President's claim that the bloated federal highway and energy bills will make our economy more efficient and lead to the creation of hundreds of thousands of new jobs.)

It does appear, though, that Congress is close to permanently repealing one of our most economically stifling taxes-the death tax. The House has already done so. When Congress returns from its summer recess, Sen. Jon Kyl (R.-Ariz.)will lead an effort to beat back a Democratic filibuster and secure a vote on the House-passed bill. Heritage Foundation economists estimate that this tax directly undermines job creation and wage growth and causes between 170,000 and 250,000 potential jobs to be lost each year. Vote counters believe that Kyl has moved to within one or two votes of the magic 60 needed to end a filibuster.

Then, in late September, the President's tax commission will release a report expected to recommend myriad ways to transform the impenetrable U.S. tax code into a simpler and fairer one that maximizes economic growth. Conservative tax experts hope the report will spark a tax-reform debate that leads to far-reaching legislation next year.

What Really Matters

Democracy Corps, the political advocacy group founded by Stanley Greenberg, former Clinton adviser James Carville and leading Democratic campaign operative Bob Shrum, recently conducted a series of focus groups with rural voters in Wisconsin and Arkansas and "disaffected Bush voters" in Kentucky and Colorado.

Their findings have given Democratic strategists pause. Even though "most voters in these [focus] groups were tremendously upset over the current direction of the country and saw little difference between Democrats and Republicans in Washington," one distinction "severely limits the potential for Democratic gains."

Among non-college voters, "cultural issues not only superseded other priorities, they served as a proxy for many voters on those other issues." According to Greenberg, most of these voters expressed little understanding of the differences between Republicans and Democrats on most policy issues. But "they felt it safe to assume that if a candidate was 'right' on cultural issues-i.e., opposed to abortion, but most importantly opposed to gay marriage and vocal about defending the role of faith and traditional Judeo-Christian values in public life-that candidate would naturally also come closest to their views on these other issues."

So will Democratic lawmakers begin to distance themselves from the cultural liberal elites in Hollywood, the National Organization for Women and People For the American Way, whose policy dictates have so disabled them in national elections?

Mike Franc, who has held a number of positions on Capitol Hill, is vice president of Government Relations at The Heritage Foundation.

About the Author

Michael Franc Distinguished Fellow
Government Studies

First appeared in Human Events