- The Washington Times - Monday, October 21, 2002

Just days before the polls open Nov. 5, the government will announce two politically sensitive economic indicators that could sway the outcome of this incredibly close midterm election.
First, it will announce at the end of this month how fast (or how slow) the economy grew in the third quarter. That number the gross domestic product (GDP) is the sum of all the goods and services produced within the United States. The GDP could influence the stock market, which could affect the pivotal, undecided swing voters who may decide some very close Senate races.
The GDP was growing at around 5 percent annually between January and March, then slowed sharply to 1 percent between April and June. Blue chip forecasters say GDP has been running about 3 percent or so for the past three months. If so, that would prove the economy continues to grow at a moderate pace, which would probably boost the financial markets.
Relatively few voters pay attention to GDP numbers, but they do pay a lot of attention to the unemployment report, which will come out on Nov. 1, the weekend before the elections. The jobless rate currently stands at 5.6 percent. If it rises significantly, that could help Democrats who are trying to make the anemic economy the central issue in the elections.
Every poll shows the economy (including the stock market) is the No. 1 concern in voters' minds right now. But so far there has been little evidence it is hurting Republicans nationally.
If it was, Democrats would be winning the generic congressional vote surveys. Historically, the GOP does well in the elections even when the Democrats are leading the generic vote by several points (because the Republican vote tends to be underweighted in the sampling).
But almost all of the latest polls show the generic vote is tied "and it has basically been this way for seven months," Republican National Committee pollster Matthew Dowd said in a memo last week to Republican officials.
Mr. Dowd, who polled for President Bush in his 2000 campaign, does not deny voters are soured on the economy. "The public continues to be very concerned about the economy and is somewhat less optimistic than they were a few months ago," he said.
In an unusually frank assessment, Mr. Dowd added that "a majority of the public thinks the economy is going in the wrong direction, not the right direction."
However, he said, "Pundits and strategists of both parties have mistakenly assumed Democrats would benefit because of this."
Both his polls and most independent polls find the Democrats and the GOP are tied on which party can better handle the economy.
It shouldn't be this way. Democrats should be winning the economic issue hands down. In fact, Mr. Dowd admitted, "It is positively amazing that with an economy growing less than we would like, the Democrats have no inherent advantage on this issue or on any of the voters' top concerns."
The reason for this may have to do with a much more knowledgeable investor class electorate. Polls show they blame the terrorist attacks, the corporate accounting scandals and the usual ups and downs of the business cycle, not Mr. Bush or either of the two parties.
Moreover, the voters have not heard any concrete, credible economic growth proposals from Democratic leaders, Mr. Dowd says.
In a hasty, 11th-hour attempt to correct this, House Democratic leader Dick Gephardt and Senate Democratic leader Tom Daschle proposed 5-point programs on the economy. At the heart of their plans was a massive $200 billion, "pump-priming" spending program that would have no growth effect in a $10 trillion economy.
They called for extending unemployment benefits, raising the hourly minimum wage, federal aid to the states and a short-term, refundable tax credit for low- to middle-income workers, even if they pay no income taxes.
Their plan would spend a lot of taxpayer money, some of which would have to be borrowed from Social Security, but it would not create a single private-sector job.
The GOP's plan, also unveiled at the last minute, would at least help small investors offset some of their stock losses on their tax returns and permanently raise the IRA and 401(k) contribution limits next year to help workers build stronger retirement savings.
But the GOP's economic-growth agenda could stand some improving, too. Mr. Bush's tax cuts are being implemented much too slowly, and there is precious little on the rest of their legislative plate to get excited about.
Some in the White House and in the Republican leadership wanted to call for a bigger, tax-cutting growth agenda in the elections' closing weeks. But that idea was nixed because administration officials feared it would look like the White House was panicking on the economy.
So the administration's economic strategy is to "stay the course" and pray the GDP and jobless numbers that will be coming out soon do not give the Democrats the political push they need in the home stretch.

Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide