- The Washington Times - Sunday, July 28, 2002

News Analysis

The Democrats have been pounding the administration over the corporate accounting scandals and the stock market's nose dive, but several upcoming actions could converge to deflate, if not defuse, their attacks.
Last week, former Vice President Al Gore blamed President Bush's tax cuts for ushering in an environment of "unfettered corporate greed." Senate Majority Leader Tom Daschle of South Dakota said it was Mr. Bush's "laissez faire" policy toward business that led to the scandals. Other Democrats accused Mr. Bush of practicing "voodoo economics" and running an "oil-industry administration."
But Republican pollsters say these attacks are not working and are even drawing a backlash from voters.
"The bottom line is that people want solutions, not partisan attacks, and that's all the Democrats are giving them at the moment, just partisan attacks," said pollster David Winston, who presented his latest survey findings to several dozen lawmakers on Capitol Hill last week.
Mr. Winston declined to discuss the specific numbers in his poll, but a House leadership official who attended the meeting said: "The number one message that voters are hearing from the Democrats throughout this period is attack. Of those who heard their message, 18 percent were most likely to vote for Democratic candidates and 58 percent were less likely to vote for them."
"Right now their attacks are benefiting us because every time they launch an attack on the president and the Republicans, people especially independents respond negatively to it," Mr. Winston said.
White House strategists believe that the Democrats' attacks, whatever their effect, will be rebutted by a series of events during the next few weeks that will show Congress and Mr. Bush aggressively dealing with scandals and the stock market's past volatility. Among them:
Mr. Bush will sign a sweeping corporate accounting reform bill, potentially this week, to create an oversight accounting board in the Securities and Exchange Commission and impose tougher criminal fines and jail sentences on wrongdoers.
The Justice Department is reportedly ready to bring criminal charges against several former WorldCom Inc. executives after the arrest of Adelphia cable corporations executives on charges of fraud last week.
Mr. Bush intends to follow this up with an economic forum Aug. 13 in Waco, Texas, to bring together administration policy-makers, economists, business owners, small investors and union leaders to discuss the economy, and ways to accelerate growth and investment.
Aug. 14, in an unprecedented government action, becomes the SEC's deadline for chief executive officers of 1,000 large publicly traded corporations to certify that their annual and quarterly financial reports are accurate and honest.
White House strategists believe that these and other actions will reinforce public confidence in how the administration is handling the corporate scandals and that they will effectively blunt any future Democratic attacks.
"We'll be seen fixing the problem, while the Democrats will be seen making political attacks," an administration official said Friday.
The bounce back in the Dow last week also helped ease the public's frustration and anger over the relentless decline in worker retirement accounts during the past eight weeks, followed by a rise in the University of Michigan's closely watched consmer confidence index for July.
Even so, there were words of caution on both sides of the political battle lines as the midterm election drew nearer.
Al From, president of the centrist-leaning Democratic Leadership Council, is warning his party against sounding anti-business.
"We need to figure out how we deal with this corporate governance scandal, and we need to have a long-term strategy," he said.
Pollster John Zogby added, "Democrats have to be very careful here. The economy could really turn around, and they have to be careful not to make this a populist battle against the rich because that doesn't cut it.
"With 66 percent of likely voters invested in the stock market, they don't want to battle the rich, they want to be rich," Mr. Zogby said.
Meanwhile, Wall Street economist Larry Kudlow thinks the administration must look beyond its latest actions and "revive a growth and optimistic future-outlook message."
"They need to revive tax reform and regulatory reform to back up this message with specifics. Right now, too many decisions on the economy are being made with political expediency in mind. Much too Nixonian," Mr. Kudlow said.


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