Wednesday, September 14, 2005

Rhode Island’s Sen. Lincoln Chafee, who opposes much of President Bush’s agenda, including the tax cuts that pulled the U.S. economy out of a slump, is the Senate’s most vulnerable Republican.

With good reason, just the mention of Mr. Chafee’s name in the West Wing triggers scowls. To say this renegade liberal, who admits he didn’t vote for Mr. Bush, is not a team player is putting it mildly. But in the battle to keep the Democrats from making gains in the Senate next year, Mr. Bush’s election strategist Karl Rove and Senate Republican campaign chief Elizabeth Dole are clearly in Mr. Chafee’s corner.

The reason: Mr. Chafee’s leftist positions on social and economic matters appeal to Democrats and independents in an overwhelmingly Democratic state. Mr. Rove and Mrs. Dole may not like his voting record, but they think he has the best chance of holding on to a seat that is the Democrats’ No. 1 target in what could be a tough election year for the GOP.

Thus, when Cranston, R.I., Mayor Stephen Laffey, a former investment banker and Republican supply-sider, told them he intended to challenge Mr. Chafee in next September’s Republican primary, they tried to talk him out of it. To sweeten the deal, Mrs. Dole and the state’s Republican Gov. Don Cancieri urged him to run for lieutenant governor, putting him in a strong position to seek the governorship.

But Mr. Laffey didn’t bite. He announced his Senate candidacy last week, triggering an unusual situation in which Mr. Rove, Mrs. Dole and other top Republican officials are actively working to defeat him in the coming primary fight.

They fear while Mr. Laffey may well win the party primary, because the state GOP’s rank and file is far more conservative than Mr. Chafee, he would surely lose the general election.

Mr. Laffey was told the same thing in 2002 when he ran for mayor of Cranston, a city with the country’s lowest bond rating, and which was facing bankruptcy and drowning in wasteful spending, questionable contracts and sweetheart deals. But he won handily in a more than 2-to-1 Democratic city and became one of the state’s most popular Republicans.

However, while he now attacks Mr. Chafee for opposing tax cuts, the National Republican Senatorial Committee chaired by Mrs. Dole wants the state’s voters to know Mr. Laffey’s hands are not clean on the tax issue, either.

An NRSC research memo that dug into Laffey’s record as mayor, titled “The Laffey Tax Machine,” says, “One of [his] first official duties as mayor was to raise taxes 12.8 percent, approximately $490 for a home valued at $150,000.”

The property taxes were increased one month after Mr. Laffey was sworn in as mayor in January 2003. The city, he told taxpayers, needed to “bite the bullet” to put its fiscal house in order and re-establish its bond rating.

The NRSC report, which I obtained, said the Laffey “tax hike was on top of an 111/2 percent increase property owners had already seen that year. Adding in Laffey’s supplemental tax, Cranston homeowners’ taxes were 25.8 percent higher than the year before.” He has since proposed budgets requiring additional tax hikes, an effective increase of 31/2 percent in the property tax rate in fiscal 2004 and a 41/2 percent tax increase in fiscal 2005 (though the City Council later approved a budget with a 3.7 tax rate increase).

Mr. Laffey stoutly defended his actions in an interview with me, saying the city faced a fiscal disaster and its credit rating had fallen to junk bond status. “We had 27 days before we defaulted on $18 million of debt. If Cranston had been a public company, we would have gone bankrupt, but you don’t do that in a city. We had to get the bond rating back up in order to pave the roads and do all the rest.”

While his tax increases were criticized by Mr. Chafee and party leaders in Washington, voters have cheered Mr. Laffey’s actions, giving him a second term last year with a whopping 65 percent of the vote.

But even as he defends his tax increases, he says he is a committed federal income tax-cutter who backs Mr. Bush’s reforms and seeks a broad range of additional reductions — from abolishing the estate tax to cutting the capital-gains tax.

And it would be premature to count Mr. Laffey out if he beats Mr. Chafee in the primary. He is running, not as a right-wing supply-side tax-cutter but as an articulate, populist foe of wasteful spending that has piled up a $7 trillion national debt “hurting the future of my children and yours.”

His candidacy could draw strong support and financing from the Club for Growth, whose president, Pat Toomey, told me, “I’m not convinced that Chafee is the only Republican alive who can hold that seat.”

Meantime, while the party establishment here is sticking with Mr. Chafee, the GOP’s latest broadside against his challenger — violating a hands-off rule in party primary fights — is raising eyebrows among many rank-and-file conservatives who would welcome the liberal senator’s defeat.

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

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