Archive for Wednesday, October 15, 2003

Trade debate may be key for Democrats

October 15, 2003


— Political rhetoric and political reality are two quite different things. As a rule, candidates for high office do not confront the hard facts of governmental life until after they have been elected.

Thus it is only now, after the recall election is over, that Arnold Schwarzenegger and his team of advisers are being pressed on how they would close the looming deficits in the California budget while rolling back the car tax increases at a cost of $4 billion and still protecting school programs from cuts -- and selling all this to a Democratic Legislature.

A similarly striking vacuum exists among the rivals for the Democratic presidential nomination. All nine of those worthies agree on one thing: President Bush's tax breaks for wealthy Americans must be rolled back, either to reduce budget deficits or to finance new health care benefits or both.

Some would go much further and eliminate all the reductions Bush has pushed through Congress in the past three years. Former Vermont Gov. Howard Dean and Rep. Dick Gephardt of Missouri take that position, while retired Gen. Wesley Clark, and Sens. John Edwards of North Carolina, John Kerry of Massachusetts and Joe Lieberman of Connecticut would let middle-class families keep their tax cuts and limit the rollbacks to high-income households.

Yet none of the candidates -- or their policy advisers -- are asked the obvious question: What if the House of Representatives, which must originate revenue bills, remains under Republican control in 2005?

That is the likelihood, after all. None but the most upbeat of Democrats holds out much hope for reversing the majorities Republicans have held in the House since 1994. With few open seats and few seats where incumbents appear to face serious challenges, the most optimistic Democratic prospect is to shave a few seats off the GOP's margin.

And few things in political life are more immutable than the opposition of House Republicans to any talk of tax increases. The last time rates were raised on anyone, in 1993, not a single Republican in the House or Senate voted for President Clinton's tax bill.

This fact of political life did not intrude last week when the American Enterprise Institute, a conservative think tank, had the good idea to invite three former Clinton administration domestic policy officials to help explain what a Democratic president would do about the economy.

Gene Sperling and Bruce Reed of the former White House staff and Rob Shapiro, their colleague in Clinton's Commerce Department, have been counseling current presidential hopefuls -- but are not spokesmen for any of them.

Shapiro offered the notion that the split on how broad a slice of Americans should have their taxes increased is one of two major policy differences among the candidates. The other, he said, is trade, where some would defend an aggressive effort to lower barriers to commerce, as Clinton did, while others would reject new trade pacts unless they included stiff requirements for other nations to improve environmental controls and labor standards.

I think Shapiro is dead right in saying that the trade debate is both serious and consequential. More and more members of Congress of both parties are reacting to the growing trade imbalances and to the "outsourcing" of jobs to China, Mexico and other low-wage countries by seeking tighter controls on the terms of trade.

If a Gephardt or a Dean were in the White House, it is not hard to imagine a sharp change from the liberal trade policies of Clinton and Bush -- no matter which party is in control of Congress. Restrictive policies would be resisted -- and perhaps thwarted -- by a Kerry or a Lieberman.

But the tax debate that consumes the Democrats may well be an academic exercise. When I asked Reed and Sperling if the possibility of a Republican House thwarting any rollback in tax cuts ever emerged in their consultations with the candidates, they both said no. "None of the candidates has the luxury of thinking about that," Reed said.

Sperling said it is possible that even if Republicans remain in control of the House, a Democratic president "could try to get people back to the table to negotiate some of the hard things," as Clinton did in 1997, when the final steps that helped produce a few years of budget surpluses were taken.

But taxes were not raised in 1997, and Reed conceded, "Our experience was that it was hard to get a Republican Congress to take up a subject that did not interest them."

All this leads me to think that while the tax debate commands the headlines, it is the trade debate among the Democratic hopefuls that may mean more to the country's future.

David Broder is a columnist for Washington Post Writers Group.

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