Budget reflects will of the voters Signals: The public has repeatedly signaled what it wants -- and doesn't want -- in federal economic policy.

THE BALTIMORE SUN

WASHINGTON -- Democrats and Republicans lauded themselves for this week's budget compromise -- and there seemed to be enough credit to go around: From House Speaker Newt Gingrich and the GOP come a $500 child tax credit and capital gains cuts designed to spur new businesses. From President Clinton and the Democrats come deductions for college expenses and guaranteed health care for the children of the working poor.

"The American people spoke when they elected a Democratic president and a Republican Congress," proclaimed Senate Majority Leader Trent Lott. "They wanted us to work together."

Public involvement may be more direct that even he or Clinton realize. Voters have repeatedly signaled what they want -- and don't want -- in federal budget policy. And these messages have been heard.

"The public got what it wanted," says Robert D. Reischauer, former director of the Congressional Budget Office. "The only question is -- should it have wanted what it got."

Reischauer and other "deficit hawks" caution that the new budget agreement is based largely on unidentified cuts in spending after 1999, and cuts in payment to Medicare providers. "It doesn't involve a lot of sacrifice and it spreads around a lot of pleasure in the short run," he says. "The pain comes in the year 2000 and beyond."

Since the 1980s, voters have made it clear that they saw nothing inherently inconsistent with Ronald Reagan's pledge to give Americans tax breaks and balance the budget at the same time. Reagan delivered on the first promise, but never came close on the second. His administration ran record deficits, averaging nearly $200 billion a year.

In 1984, Walter Mondale accepted the Democratic presidential nomination in San Francisco by telling the American people that the prosperity of that year was built "on borrowed money and borrowed time" and that taxes would have to be raised.

A month later, Mondale was speaking at a rally in Philadelphia when he was interrupted by a leather-jacketed young man who seemed to speak for a nation. "Yo, Mondale!" he hollered in a voice loud enough to stop Mondale's speech cold. "I pay enough taxes!"

Mondale won only one state in the election. But his castor-oil approach became Democratic Party dogma. And remained unpopular. In 1988, George Bush captured the tax issue with his defiant pledge, "Read my lips no new taxes!"

But with spending increasing for programs such as Medicare, Bush eventually was forced to accept a tax increase. By 1992, millions of voters concluded that the president had no idea of what was happening in the American economy -- and in their lives.

Clinton's victory in 1992 -- and numerous polls and focus groups -- suggested that Americans had by then come to a rough consensus about the most important matters facing the federal government. They included the following:

Middle-class Americans deserved a tax break, especially those with children.

The welfare system was a mess. For all the money being spent on it, the poor weren't benefiting much.

The national debt, caused by 12 years of deficit spending, was a looming crisis.

Clinton understood that mood well and his standard stump speech promised -- sometimes in the same paragraph -- tax relief for the middle class, ending "welfare as we know it" and cutting the deficit in half.

Clinton's first budget bill, in 1993, raised instead of cut taxes, took only a small slice out of the deficit and was mute on welfare. Voters reacted in 1994 by sweeping into power Republicans who ran on a "Contract with America" that promised to slash taxes, reform welfare and balance the budget.

This turned out to be a turning point, but not the kind envisioned either on Capitol Hill or in the White House. In December 1994, Clinton finally unveiled his own tax cut proposal. Republicans scoffed, but several of those ideas are now about to become law. In 1995, Clinton vetoed Republican budget bills that he denounced as too harsh to the poor -- and saw his popularity increase. In 1996, Clinton resisted the bitter opposition of Democratic liberals to sign an overhaul of the nation's welfare laws, and then defeated Bob Dole.

Those election results established two more of the American people's budget priorities:

The budget needn't be balanced -- nor the tax cuts enacted -- at the expense of the poor.

Nor should the Republicans be allowed to cut funds for education or achieve their aims by resorting to programs such as drilling for oil in national wilderness areas.

"The Republicans thought the Contract was carte blanche, but the public didn't want them to go that far," says Amy Isaacs, national director of a liberal group, Americans for Democratic Action. "Gingrich got this message and some of his colleagues didn't."

Clinton did not gloat. Instead, he called for a new spirit of cooperation between Democrats and Republicans on the main issues that divide them on the federal level: spending and taxing priorities.

Yesterday, Clinton paused in the midst of a partisan, Democratic rally on the South Lawn of the White House to underscore this theme: "I also want to say a special word of appreciation to Senator Lott and Speaker Gingrich," he said, "and to their committee chairs, who worked with us across the lines of substantial philosophical and practical differences to reach a good faith agreement that is an honorable and principled compromise."

This mirrored what he had been saying since the night of his re-election victory. Clinton asserted that the American people had sent both parties a message: "Work together, meet our challenges. Put aside the policies of division."

Led by an influential Republican pollster and consultant named Frank Luntz, many prominent Republicans said precisely the same thing.

"It was something the country wanted and the ideologues didn't," says Will Marshall, president of the Progressive Policy Institute. "The center asserted itself against the wings of both parties."

Thus the stage set for this week's compromise. The architects of the deal -- the voters -- had drawn clear blueprints. And a humming economy had done the rest, dulling the arguments of the deficit hawks in both parties.

"Somehow, the stars were in the right configuration," says Stephen Hess, a presidential scholar at the Brookings Institution. "There was enough money to play around with and the timing was right -- three years 'til the next presidential election.

"The politicians seem to have correctly deduced what the sense of the people was."

Pub Date: 7/30/97

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