- The Washington Times - Sunday, July 21, 2002

News Analysis

House Minority Leader Richard A. Gephardt, Missouri Democrat, bets the steep decline in the stock market will help Democrats win back the House in November, but campaign analysts see no evidence of any election swing away from the Republicans yet.
Republican campaign officials cited an ABC News poll, released Thursday night, showing that the generic congressional vote was in a dead heat, with Democrats edging out the Republicans by 47 percent to 46 percent.
"Republicans typically go into Election Day with a generic deficit of three or four points, so that number shows we are in great shape," said a National Republican Congressional Committee official.
But as the stock market descended deeper into its continuing nose dive Friday, the Democrats intensified their election offensive, blaming the financial debacle on President Bush and the Republicans, and their economic policies.
"Democrats in the House want to restore investor confidence and get the economy back on track," said Kim Rubey, spokeswoman for the Democratic Congressional Campaign Committee. "We need tough measures to ensure that scandals like Enron and WorldCom don't happen again. Republicans have shown no leadership on this issue."
Republicans struck back, accusing the Democrats of playing to investors' fears and attempting to talk down the economy for political gain.
"It's clear that the Democrats are talking the market down," said NRCC spokesman Steve Schmidt. "Gephardt is playing politics with this issue in an unconscionable way. There are people who have been harmed by corporate thievery and malfeasance. He's exploiting these people's hardships and cheerleading for a stock market decline so he can score political points with it."
But as the turmoil in the financial markets worsened, strategists in both parties were carefully studying polling data to see whom the voters blame for the corporate and accounting scandal that triggered the market's latest downturn. Democrats hope voters will decide to vent their anger over sizable stock losses by voting Democratic in November.
Mr. Gephardt said earlier this week that the furor over the recent corporate scandals could help Democrats win in as many as 40 districts in November. "There are at least 40 seats in play that we have a chance to win," he told a gathering of Democrats.
Elections analyst Stuart Rothenberg, who tracks congressional races, said he sensed that the chances of Democratic gains in the House and Senate "have improved in the past few weeks."
But he added that "at this point we are still in the process of evaluating how the mood swing affects the races. There are no races where the mood swing has shown up right now."
Still, he said, "in the current environment, it wouldn't be surprising if voters became nervous about the future, worried about what's going to happen next, and that could lead many people to say, let's look for something different."
Matthew Dowd, who was Mr. Bush's campaign pollster in the 2000 election, sees no evidence as yet that "the president's numbers have been affected by this. The generic congressional ballot numbers have been basically dead even for the last six months."
"Right now, the public is angry, but that anger is not aimed at a politician or a party but at business executives," said Mr. Dowd, who polls for the Republican National Committee. "Voters overwhelmingly, by 70 percent, blame corporate executives and bad business practices. After that, [the remaining blame] is a three-way, single-digit tie between the president, Republicans and Democrats."
However, Mr. Bush gets lower approval scores from pollster John Zogby, whose latest survey puts the president's positive job approval rating at 62 percent, down from 69 percent just two weeks ago.
"Democratic voters are coming home," Mr. Zogby said. "They had supported Bush on the war, but they are coming back to their party as the election starts to heat up. The stock market and the economy are driving the president's numbers down.
"The Democrats needed something to knock Bush off his high pedestal and, for the time being, they got it," he said.
"I think, right now, the Democrats are in the drivers' seat. The issues are in their favor, and in hot, close races anything that gives them a slight edge could tip the balance," he said.
But other factors have been at work as well. With just 3 months to go before the elections, the Democrats have not been able to develop a national issue with any political traction. Their party's base was deflated and needed to be energized, said Democratic strategists who worried about low Democratic turnout in the primaries this year.
"In Democratic statewide primaries, 10 of the 18 primaries resulted in record low turnouts," including California, Iowa, New Jersey, New Mexico and Ohio, said Curtis Gans, a voter turnout specialist.
"Gephardt is attempting to boost morale, to energize his party," Mr. Rothenberg said. "Finally, you may have something to get the Democrats angry and get them out to the polls."
Republican strategists say the Democrats' attempt to exploit the stock market's slide may work for them, up to a point. But they say that it will be hard for the Democrats to blame Republicans if pending legislation to crack down on corporate auditing abuses passes Congress and the president signs it.
"If the public sees the president and Congress doing something to solve this by passing a bill, then it will be difficult to lay the blame at the feet of the politicians on this," Mr. Dowd said.
Mr. Bush has asked Congress to act on the bill before the August recess. But Mr. Gephardt said last week that action on the legislation could take two months to work out, signaling that he was in no hurry to help the president and the Republicans win quick action on a bill.
"There is one other possibility that can rob the Democrats of this issue between now and the Labor Day kickoff point of the campaign," said a senior Republican official on the condition of anonymity "a major rally in the stock market."

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