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The primary economic challenge today is that our government spends too much money it doesn't have, and it is involved in too many things it cannot do well and shouldn't do at all. This burden is manifested by a $1.3 trillion annual deficit and a $14 trillion national debt. The more pernicious effects of this fiscal drag are unseen: a debased dollar, massive (and hidden) unfunded liabilities, and a crushing burden on would-be job creators.
On Feb. 9, 2009, Mary Rakovich, a recently laid-off automotive engineer, set out for a convention center in Fort Myers, Fla. with protest signs, a cooler of water and the courage of her convictions. She felt compelled to act, having grown increasingly alarmed at the explosion of earmarks, bailouts and government spending in the waning years of the Bush administration. President Barack Obama, joined by then-Republican Gov. Charlie Crist, was in town promoting his plan to spend a trillion dollars in borrowed money to "stimulate" the economy.
Democratic House members are so worried about the fall elections they're leaving Washington on July 30, a full week earlier than normal—and they won't return until mid-September. Members gulped when National Journal's Charlie Cook, the Beltway's leading political handicapper, predicted last month "the House is gone," meaning a GOP takeover. He thinks Democrats will hold the Senate, but with a significantly reduced majority.
Elections this week left Democrats scrambling to renew the coalition that elected President Barack Obama after independent voters, whose power to determine U.S. elections is rising with their numbers, broke heavily toward Republicans.
WASHINGTON -- When throngs of conservative protesters descended on the capital last month, former House Majority Leader Dick Armey led the crowd in a pro-market chant. "Freedom works!" he yelled. "Freedom works!"It wasn't just a rallying cry. It was also a plug for Mr. Armey's small-government advocacy group, FreedomWorks, which the Texas Republican hopes will emerge from a summer of political turmoil as the right's answer to such liberal activist groups as MoveOn.org.
ATLANTA -- Several thousand people turned out in Centennial Park on Saturday to demonstrate opposition to President Barack Obama's effort to overhaul the health-care system. Protesters carried signs saying, "Obamacare Makes Me Sick!" or "Socialized Medicine Hotline: 1-800-YOU-DEAD."
The opposition to the health-care overhaul being voiced at town-hall meetings this month caught supporters by surprise. Unions and other supporters of the Democratic health program now have plans to confront opponents, including, if necessary, outshouting them at meetings.
<p>Stephen Moore is president of the Free Enterprise Fund and a senior fellow in economics at the Cato Institute.</p>
<p>Washington -- FOR ALL THE ATTENTION paid to partisanship in this town, the more interesting -- and consequential -- fights here in this election year will pit Republicans against Republicans. A new level of tension is emerging between President Bush and the congressional Republicans he expects to deliver his election-year agenda. Among the sore points, Mr. Bush's initiative to give legal status to immigrant workers who are here illegally, a bid to attract Latino voters, instead has roiled the party's conservative faithful. Republicans have been put on the defensive over the President's policies on Iraq. And record deficits and spending suddenly have Republicans questioning his fiscal stewardship.</p> <p>"Well, they're wrong," Mr. Bush said on NBC's "Meet the Press" yesterday, when asked about barbs from conservatives over his fiscal record. But the very fact that Mr. Bush needs to defend himself shows he faces political strains that were absent during the party's successful 2002 midterm elections.</p> <p>No one goes so far as to say the tension yet threatens Mr. Bush's re-election or his party's House and Senate majorities. But Republicans would like to pad their narrow margins, if they and Mr. Bush hope to achieve much in a second term. Party leaders insist they can still avoid lackluster turnout by conservative voters, which Bush advisers blame for their near-defeat in 2000.</p> <p>"There is frustration among some conservatives, but mostly it is focused in the think tanks here," says Ed Gillespie, the Republican Party chairman. "I'm keeping my ear to the ground. But I do not believe we're at a point where concern translates into turnout problems."</p> <p>Activists in the think tanks and hard-line conservatives in Congress, though, insist the unrest is bottom-up, with grassroots Republicans erupting over pork- fattened appropriations bills, spending rates exceeding those of the Lyndon Johnson era and a new, budget-busting Medicare drug benefit. The conservative groups and lawmakers now "are trying to stay ahead of their grassroots base," says former House Republican Leader Dick Armey, who heads one such group, Citizens for a Sound Economy.</p> <p>Tom Schatz, president of Citizens Against Government Waste, says grassroots activists are outraged equally at Congress and the White House, even as Mr. Bush and his aides increasingly imply that Congress is at fault. "We are well aware that Congress is more to blame," he says, "but if he's not going to veto any bills, he has to share the blame."</p> <p>Such grumbling is especially striking at a time when Democrats, energized by anti-Bush fervor, have been turning out in big numbers for state party presidential-nominating contests. Some national polls even show Democratic front-runner John Kerry leading Mr. Bush.</p> <p>"It is the winter of discontent in his political base, and our base is electrified," says Democratic Rep. Rahm Emanuel of Illinois, a former top Clinton aide.</p> <p>Some intraparty tension is only natural when one party controls all levers of federal power. Republicans on Capitol Hill have shown more party discipline than Democrats did when they controlled Congress during the first two years of Bill Clinton's presidency.</p> <p>But spending and an annual deficit now projected to exceed a half-trillion dollars are placing new pressure on the ties between Mr. Bush and Congress's Republican leaders. Mr. Bush is drawing fire even for his seemingly minor proposal to boost funding for the National Endowment for the Arts, a longtime target of small-government conservatives.</p> <p>"If people are hearing from their constituents what I'm hearing, then the stars have finally aligned," says Republican Rep. Jeb Hensarling of Texas. "Congress needs to exert some leadership. I'm not here to counsel the president, but it is time to protect the family budget from the federal budget."</p> <p>Mr. Hensarling is one of about 70 members of the House's conservative Republican Study Committee, which has become emboldened in recent weeks to demand a freeze in domestic spending and vetoes of anything above that -- starting with a pending and overdue six-year highway construction bill. Similarly, a Bush adviser says that when administration officials were at a Senate Republicans' lunch in December, Pennsylvania Sen. Rick Santorum, the Senate Republican Conference chairman and a darling of conservatives, said Mr. Bush had to start vetoing bills because Congress can't control spending.</p> <p>Mr. Bush's fretfulness about his party base was evident in his recent State of the Union address and his fiscal 2005 budget. By talking sternly about spending restraint while demanding permanent tax cuts and new funds to promote marriage, for instance, Mr. Bush was aiming more to placate the Right than to position himself as a unifying centrist.</p> <p>Congress's bottom line on spending has not been so different from the president's; only the line items are rearranged. Both sides are reluctant to have veto fights, given the picture of party mismanagement they would suggest. But that's no solace to conservatives who point to the spiraling number of Republican earmarks for individual projects -- more than 10,000 in the just- completed fiscal 2004 package.</p> <p>The White House and congressional leadership say perhaps only 20 to 40 Republicans can be counted as likely to rebel this year. But with most or all Democrats often opposed to the Republicans on a given issue, only a few defectors are needed to spell defeat. Mr. Bush learned that in December, when House leaders had to extend the usual 15-minute voting period to nearly three hours to pass the Medicare bill by one vote. Twenty-five Republicans voted no; some who switched to yes under pressure now express regret.</p> <p>That vote "put them in such a mood," says the Bush official, that "these people are spoiling for a fight no matter what the president gives them."</p> <p>In response to conservatives' anger, Mr. Bush now has struck a theme of fiscal conservatism. His administration's first targets are the highway bill and his energy package, which grew from an initial $8 billion in production incentives to $31 billion before conservatives balked. "The White House was all for the energy bill when we passed it, and now they're slowly walking away from it," says John Feehery, a spokesman to House Speaker Dennis Hastert and a top House leadership aide.</p> <p>The highway bill is widely expected to end up with funds covering far less than the six years that planners want. Many are writing off an energy bill. And, by November's Election Day, many Republicans woefully expect the government again will be operating under stopgap funds given yet another budget impasse.</p> <p>"Everybody wants less spending in areas they don't care about," says Mr. Feehery. "It's going to be a really difficult year."</p> <p>--- </p> <p>Relying on the Base</p> <p>A breakdown of the President s approval ratings shows his support runs <br /> deepest among self-described conservatives.</p> <p>Q: Do you approve of the job that George W. Bush is doing as president?</p> <p>Yes No Unsure</p> <p>Liberals 23% 70% 7% <br /> Moderates 48% 48% 4% <br /> Conservatives 77% 18% 5%</p> <p>Q: How would you rate your feelings toward George W. Bush?</p> <p>Positive Negative Neutral</p> <p>Liberals 24% 69% 6% <br /> Moderates 50% 42% 8% <br /> Conservatives 78% 16% 5%</p> <p>Source: January 2004 WSJ/NBC News survey of 1,002 adults; the margin of <br /> error is plus or minus 3.1 percent.</p>
<p>Lost amid Tuesday's Presidential primary results was the encouraging news that Oregon voters had once again defeated a tax increase. Maybe the Democratic candidates should pay attention. Facing a hole in its oversized budget, the Oregon Legislature in August passed an $800 million tax hike, including an income tax surcharge of up to 9% as well as increases in property, business and cigarette levies. Yet despite screams of ominous cuts to health and education, voters in this state that voted for Al Gore in 2002 overruled the legislature by a resounding 60%.</p>