"Capitol Impact 2006"-The Economic Role
Friday, November 03, 2006SUSIE GHARIB: The conventional wisdom in Washington is that next week's mid- term election will be a referendum on Iraq. That may be true, but some analysts think both parties missed a real opportunity to lay out a new economic vision for the future. As we continue our series "Capitol Impact 2006," Washington bureau chief Darren Gersh says some people think this election could have been a mandate for change.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Virginia Senator George Allen sounds like many other Republican candidates on the economy. He hits a long list of bullet points on energy independence, education and health care for small businesses. But then he hammers away at what he calls a defining issue in the campaign: tax cuts on capital gains, dividends, tax cuts for businesses, tax cuts for married couples.
SEN. GEORGE ALLEN (R) VIRGINIA: All of this has spurred economic growth. People are better off because of it. You're deciding how you want to spend that money. And it's helping the economy.
GERSH: With 4.4 percent unemployment and a booming stock market, that message should be working, but polls show it's not. Most Americans now think Democrats would handle the economy better and Republicans like economist Kevin Hassett think that's because his party missed its chance to change the subject from Iraq. In 1994 Republicans won control of the House offering ten points called the contract with America. Twelve years later, Hassett says Republicans should have rolled out an economic version of that contract.
KEVIN HASSETT. ECONOMIST, AMERICAN ENTERPRISE INSTITUTE: There has been a policy void really for the last couple of years and a contract would probably create quite a bit of momentum for Republicans and change the debate. But they haven't done that. I think, even as a Washington insider, that I have no idea what the Republican's agenda would be if they were elected, if they actually win.
GERSH: Because the Bush tax cuts don't expire until 2010, Hassett says it was a mistake to make that the key economic issue of the campaign.
HASSETT: What they should have done is they said, look, here's what we are going to do next year. And it's going to affect you next year. Next year we're going to fix Social Security. If they had done that, then I think they probably would have excited voters a lot more than they did.
GERSH: As for Democrats, many of them sound like Jim Webb on the economy. When he campaigns to take Allen's job representing Virginia, Webb strikes a populist note.
JIM WEBB, SENATORIAL CANDIDATE, VA (D):When you have a situation where corporate profits are at an all-time high and it's not trickling down to the workers, it needs to be addressed. And it's not anti-business to say that. It's just fairness to say it.
GERSH: By highlighting fairness, Democratic strategist Ruy Teixeira says his party has scored points with voters. But that isn't the same as offering a compelling new point of view on the economy. Teixeira says the public has rejected President Bush's ownership society, but Democrats haven't filled the void. He says democrats should have connected economic security with opportunity.
RUY TEIXEIRA, FELLOW, CENTER FOR AMERICAN PROGRESS: People think of themselves as the hero in their own economic drama, and you don't want to tell a hero that they're a loser. And that's too often what they hear from the Democrats.
GERSH: Polls now show this election is likely to shift control of the House of Representatives, perhaps even the Senate. But on the economy, analysts say neither party has laid the foundation for a major change in policy in the coming congress. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
