Bush and Daschle spin the economy.

Bush and Daschle spin the economy.

Bush and Daschle spin the economy.

How you look at things.
Jan. 8 2002 5:35 PM

Liars' Poker

How Bush and Daschle stack the deck in the economics debate.

From Sept. 11 to the end of last year, Democrats and Republicans united behind the war on terrorism. They quarreled here and there but didn't let those quarrels disrupt the feeling of national consensus. That truce has ended with the dawn of the 2002 election year. On Friday, Senate Majority Leader Tom Daschle attacked President Bush's management of the economy. On Saturday, Bush struck back. Each side wants to control the way you think about taxes, deficits, and the economy. Here's a tip sheet on how they're rigging the questions.

Advertisement

1. One war or two? Americans overwhelmingly support Bush's management of the war, but they're less certain about his management of the economy. Therefore, to beef up support for his economic policies, Bush is trying to make you think of them as part of the war. "The terrorists not only attacked our freedom, but they also attacked our economy. And we need to respond in unison," he argued Saturday. The White House now routinely describes its domestic agenda in terms of "economic security," thereby making your senator look unpatriotic if he or she opposes, for example, Bush's proposal to repeal the corporate alternative minimum tax. Everything Bush wanted prior to Sept. 11—tax breaks, trade authority, Republican energy legislation—is now framed as a response to Sept. 11.

William Saletan William Saletan

Will Saletan writes about politics, science, technology, and other stuff for Slate. He’s the author of Bearing Right.

Daschle's strategy is to separate the war from the economy. "Our nation is engaged in two great battles," he said Friday. "In the first battle, the battle against terrorism, President Bush and his national security team are doing a superb job." However, in "our economic battle, I think most Americans would probably agree that the news hasn't been so good lately." As you weigh whether Bush or Daschle is better suited to handle the next challenge, Daschle wants you to forget that Bush did a good job of handling the last one. Instead, Daschle tries to turn public support for the war against Bush by arguing that Bush's economic policies are crippling the war effort. "At a time when we need to fight both a war and a recession," said Daschle, Bush's "tax cut has taken away our flexibility" by draining the budget surplus.

2. Practicality or ideology? Most Americans dislike ideologues. That's why Bush, like Daschle, pretends that he's the pragmatist, and the other guy is the ideologue. "There are troubling signs that some in the nation's capital want to go back to the old ways" of partisanship, Bush warned Saturday. "We ought to get on about the American people's business. … I just hope some of the senators that kind of stood in the way of getting an economic plan done listen to the people … and come back and do what's right for the country."

At no point does Bush concede that if he and the Democrats are engaged in a partisan conflict, he, too, is being partisan—or that if he and the Democrats are honestly debating the nation's business, the Democrats, too, are being pragmatic. Bush never attacks Democrats by name. Instead, he uses code, praising "the House" while accusing "the Senate" of obstructionism. Behind this language lies a neatly concealed assumption that the president has the right of way and that anyone who collides with his agenda is at fault.

Advertisement

Daschle plays the same game. On Friday, he called for "a return to fiscal responsibility." As Daschle described it, "In 1993, we made a decision: No more living beyond our means. No more borrow-and-spend." But in 2001, "Republicans chose ideology over experience. Experience showed that fiscal responsibility works. Ideology dictated tax cuts no matter what the circumstances. … What this moment calls for is experience, not ideology—cooperation, not conflict." At no point does Daschle mention that the "fiscally responsible" decision made in 1993 was to raise taxes. He doesn't even mention the word Clinton. If Daschle can con you into thinking that tax hikes aren't ideological but tax cuts are, he can get you to conclude that Republicans, not Democrats, are being uncooperative.

3. Budget or economy? Budget deficits impair economic growth, and impaired economic growth exacerbates budget deficits. Daschle wants you to focus on the former, while Bush wants you to focus on the latter. On Friday, Daschle asserted that the 1993 decision to move toward balanced budgets "lowered our long-term interest rates and increased business confidence, which helped spark new investment, which produced strong economic growth." But thanks to the GOP's abandonment of this "fiscal responsibility," he argued, "the rapidly disappearing surplus is a key reason long-term interest rates have barely budged," thereby dampening investment and causing "more job losses."

Bush poses a different question. "We need to ask the question, what about jobs? How do we create jobs?" he said Saturday. "There's some in Washington saying that the tax cut caused the recession. I don't know what economic textbook they're reading. The best way to come out of a recession is to say to the small-business person, 'We'll let you keep your own money.' When we cut taxes on all rates, we said to the sole proprietor or the limited partner, 'It's your money. You spend it, in order to expand the job base in America.' " Bush aides reason that if people have jobs, the economy will grow, tax revenues will rise, and the budget will balance.

Basically, this is a chicken-and-egg problem. Daschle is saying you can eat your eggs because your chicken will lay more eggs. Bush is saying you can eat your chicken because your eggs will grow into more chickens. Each of them is glossing over the problem that fewer chickens means fewer eggs, and vice versa. Daschle wants you to overlook the fact that taxes slow the economy, which worsens budget deficits. Bush wants you overlook the fact that budget deficits raise interest rates, which slow the economy. That's why Daschle never mentions taxes and Bush never mentions deficits.

Advertisement

4. Tax hike or tax-cut cut? Bush insinuates that Daschle, by virtue of criticizing Bush's tax cut, is calling for a tax increase. "There's going to be people who say we can't have the tax cut go through any more. That's a tax raise," Bush said Saturday. "One of the interesting debates is going to be, do we let the people keep the money that we promised them or not?" On Sunday, Bush's treasury secretary, commerce secretary, and chief economic adviser made clear that the target of Bush's criticism was Daschle. In addition to its odd logic—illustrated by Bush's near-oxymoronic pledge to "let the people keep the money that we promised them"—the argument is deliciously hypocritical. Less than a year ago, when Democrats accused Bush of cutting various federal programs, he pointed out that he was only cutting the rate of increase in those programs.

Daschle's obfuscation is equally hypocritical. On Friday, he called high interest rates "the hidden tax of the current fiscal policies." He urged the government to "restore long-term fiscal integrity to our budget" in order to lower interest rates and thereby give Americans "the best possible tax cut." But while deconstructing Bush's "hidden" tax, Daschle used euphemisms such as "fiscal integrity" to hide the fact that Daschle is trying to preserve the non-hidden taxes Bush is trying to cut.

Clinton Treasury Secretary Bob Rubin, who introduced Daschle, skirted the truth more egregiously. When asked on Sunday whether the tax cut should be repealed or delayed, Rubin replied: "I wouldn't go at it that way. I think the tax cut was unwise. … [T]he people who are responsible for the tax cut … should take [responsibility] for repairing the damage." Out of one side of their mouths, the Democrats criticize Bush for failing to specify the spending cuts necessary to balance the budget. Out of the other side, they refuse to specify the tax hikes or tax-cut reductions necessary to reach the same result.

There are other dimensions to the debate, such as to what extent you should blame the recession on Sept. 11, and how high your expectations should be for a recovery. But the four questions outlined here are the ones most susceptible to spin and most pivotal in determining which party wins the elections. Keep them in mind as you listen to this year's debate. Bush and Daschle will try to tell you that it's the economy, stupid. But the economy isn't that simple, and you aren't that stupid.