Friday, November 9, 2001

Democratic victories in the New Jersey and Virginia gubernatorial elections on Tuesday are, predictably, being characterized as proof that the era of big government is back Political pundits are also suggesting that the tax-cutting message of the GOP, which was paydirt for Republicans in the 1990s, is no longer appealing to the median 21st century voter. Only people who paid zero attention to what was said in these two races could make that claim.

Surely the defeats of Bret Schundler in New Jersey and Mark Earley of Virginia are blows to conservatives. Both ran as strong anti-tax candidates.

Both attacked the victorious Democrats (Mark Warner in Virginia and Jim McGreevey in New Jersey) for their secret plans to raise taxes. And both lost. But not because New Jersey and Virginia voters opted for a return to Democratic tax and spend policies.

Just the opposite. One of the most remarkable features of these two races was that Mr. Warner and Mr. McGreevey both veered as far to the right on fiscal issues as Democrats are permitted to without entirely alienating the left-wing base of their party. They ran successful campaigns as Bill Clinton new Democrat fiscal conservatives eschewing the era of big government. They both pledged in their debates that they would not raise taxes to balance the state budget.

In fact, as any Northern Virginian knows full well, Mr. Warner spent millions of dollars on omnipresent TV ads to tell voters exactly that. Mr. Warner described himself as a pro-George W. Bush “fiscal conservative” and touted his “plan for action,” indicating how budget deficits could be avoided without raising taxes. He pledged allegiance to the car tax elimination, which had been a polar star for Republican Jim Gilmore back in 1997. Mr. Warner sounded, in short, like a 1990s tax-aphobic Republican.

Mr. McGreevey’s 11th-hour conversion to the no new taxes camp was even more dramatic. At the start of the campaign, Mr. McGreevey refused to pledge not to raise taxes, trotting out the traditional Democratic mantra that such a promise would be fiscally irresponsible. But as Mr. Schundler showed signs of resurrecting his dormant campaign and gaining ground on Mr. McGreevey, the Democrat’s message became intensely anti-tax.

In the last debate, Mr. McGreevey was again asked if he would raise taxes. Point blank, he responded that there was no need to raise taxes and that through streamlining government and agency consolidation, expenditure cutbacks could keep the budget out of red ink. Mr. McGreevey even criticized the New Jersey Republicans (with much accuracy) for fiscal mismanagement and overspending and excessive reliance on debt during the Christie Whitman years.

At the Cato Institute, one of us (Stephen Moore) had been attacking Mrs. Whitman and the New Jersey legislature for exactly this fiscal profligacy.

What was most excruciating for New Jersey liberals was when Mr. McGreevey was asked about his vote in 1991 for the giant Jim Florio tax increase. For years, this vote was a badge of honor for leftists, who still maintain that Mr. Florio did the right thing. New Jersey voters sure don’t. So Mr. McGreevey pulled a stunning mea culpa, saying that if he knew then what he knows now, “No, I clearly wouldn’t have voted for that tax hike.” You could just see James Carville, the political architect of that soak the rich tax increase, cringing in embarrassment.

Now, we’ve both been around politics long enough to be deeply skeptical of the Warner and McGreevey oaths not to raise taxes. Our hope is that Mr. Warner keeps his promises and turns out to be another Doug Wilder, the Old Dominion’s most fiscally tight-fisted governor in 20 years, despite being a Democrat. But fiscally stressful times are ahead for the states, and new taxes are going to be mighty tempting option for these Democrats.

But in both states, any such tax flip-flop will prove mighty costly politically. Our advice to Mr. McGreevey and Mr. Warner: Don’t go there.

If Mr. Warner or Mr. McGreevey doubt the political penalty they might face for flip-flopping on taxes, they might put in a call to former New Jersey Gov. James Florio. Twelve years ago, Mr. Florio won a record Democratic landslide against Republican Congressman Jim Courter by, among other things, ruling out an increase in state taxes. By January 1990, Mr. Florio’s first month in office, he had “discovered” a fiscal shortfall that necessitated one of the steepest, most punishing tax increases in the history of New Jersey or any other state. And, of course, the rest is history: Christine Todd Whitman road the income tax cutting agenda to a stunning victory, presaging the landslide for Republicans in 1994.

One other factor played a big role in both these Republican defeats: party disunity. In New Jersey, Bret Schundler is still waiting for an endorsement from Gov. Donald DiFrancesco, the liberal acting Republican governor who was forced out of this race in the spring because of financial scandals.

Christie Whitman’s endorsement was tepid at best. She played into Mr. McGreevey’s hand by remarking that Mr. Schundler had some positions “outside the mainstream” of New Jersey.

To all too many liberal Republicans, particularly in the Northeast, the “big tent” of party unity is a concept apparently meant to be binding on conservative primary losers, but not on liberal primary losers like Mr. DiFrancesco.

There’s no sugar coating it: Nov. 7 was a bad day for Republicans. Democrats are sure to take a page out of the McGreevey and Warner playbooks and run carbon copy campaigns as they attempt to take the House in the critical 2002 midterm elections. This is all the more reason that congressional Republicans cement themselves to a strong pro-tax cut position so that Democrats can’t move to the right of them on fiscal issues this year and next.

The New Jersey and Virginia elections were a vindication, not a repudiation of the power of fiscal conservative values in America. When Democrats have to run as anti-tax advocates of fiscal restraint to win office, and when they have to distance themselves from the party’s tax and spend liberal roots, the battle for pro-growth economic policies is being won.

Stephen Moore is president of the Club for Growth. Jeff Bell, a former Senate candidate in New Jersey, is a political analyst for the Club.

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