© 2002 Copley News Service, 11/12/2002

© 2002 Copley News Service, 11/8/2002 Something is seriously out of kilter when The New York Times can report, as it did on Sunday: "Stocks thrive on downbeat economic news." Bad news is good, and the worse things get, the more optimistic investors seem to become.

Suddenly, the election is once again about George Bush, taxes, and the economy. Déjà vu? No, call it “It’s the Economy Stupid, Part II.” But as Democrats attempt to revisit the winning election playbook that brought Bill Clinton to office, they’re discovering that things are a little different this time around. What’s a Democrat candidate to do? They can’t really oppose Bush on terrorism or eliminating Saddam Hussein. Their attempts to use scare tactics on Social Security reform have mostly failed. The Enron-style corporate corruption issue is mostly on hold, thanks to a sweeping new reform bill. And new polling shows that the economy and jobs are the top issues of concern to Americans. So, last week, the Democrat leaders launched a vigorous new attack on George Bush’s “handling of the economy.” Typical was Tom Daschle’s (D-SD) rip that “…there has not been such catastrophic mismanagement of America's economy since the presidency of Herbert Hoover." Of course, markets are still down, growth is flat, and it’s not like Washington Republicans have been disciplined lately when it comes to the U.S. budget. But while there might be some fertile ground for political gains here, unlike in 1992, Democrats are discovering they’re in a box on the economy issue. Democrats might attack the orgy of irresponsible new spending in Washington. Doing so would probably get support among independents (remember Ross Perot’s charts?) and work against Republicans on their base. But the Democrats are just as, if not more, responsible for Washington’s current spending binge as the GOP. More important, Dems are also disarmed on taxes; unlike his tax-raising dad, George W. Bush is cutting them. In the absence of a coherent policy vision, the Democrats go to their old election stand-by: scaring senior citizens. Consider the AP’s description of the new ads they’re running nationwide on the economy: In one of the ads, a young husband is getting ready for work with his wife in the background. She asks him: "So, first day of the new job, ready for the big adventure?" And he responds: "Ready as I'll ever be." The narrator then talks about "$175 billion in savings gone, over 2 million jobs lost. Many seniors starting over, looking for work." The ad…cuts to a senior citizen getting ready for work with his wife in the background. "So, first day of the new job, ready for the big adventure?" she asks him, and he shrugs and replies: "Ready as I'll ever be."

The Democrats are finally trying to present an agenda to improve America’s economic growth. It’s about time. While we welcome the debate, the early signs are that, when it comes to the economy, the Democratic leadership—- some of the biggest tax-and-spenders in Congress—- still doesn’t get it.

Capitol Hill This Week…. Both sides of the Capitol continue to seek an exit strategy this week as the election looms three short weeks away. Hopes for adjourning sine die (for the year) have faded as a lame duck session has become all but inevitable. It is expected that both the House and Senate will consider a longer term Continuing Resolution (CR) this week. The past few resolutions have provided only a week of funding but this latest will probably take them through the elections until November 22nd. In the meantime, expectations for this week are low. The House only expects to take up the CR, and a possible tax bill this week. There are still some conference reports (Energy, Terrorism Re-insurance, Homeland Security) that may come up, but it is doubtful.

With the Bush administration’s sights trained on Iraq, problems on the home front remain to be addressed. Wall Street is hitting 15-year lows, corporate scandals have jarred investor confidence, and a weak market has Americans worried about job security. In Washington, Congress continues its spending spree as members race to finalize spending bills before the November election. Surpluses are a thing of the past, with the federal deficit pushing $160 billion and counting. A recent poll found a majority of Americans have serious concerns about the U.S. economy and believe that heightened foreign policy concerns have come at the expense of sound economic policies here at home.

Against the backdrop of the worst state budget crunch in years, this report presents the findings of Cato Institute’s sixth biennial fiscal policy report card on the nation’s governors. The report card’s grading is based on 17 objective measures of each governor’s fiscal performance. Governors who have cut taxes and spending the most receive the highest grades. Those who have increased spending and taxes the most receive the lowest grades.

Just a quick note to provide everyone with a Congressional update. I would say legislative update but that would be a misnomer since there really is not that much legitimate legislation going on up on Capitol Hill.

It’s not the Greatest Show on Earth, but the federal budget is definitely the most expensive circus in the world. All the more so this year, thanks to some nifty new tricks from ringleader Sen. Tom Daschle (D - S.D.). Every year, Congress is required to pass an overall plan for U.S. government spending, known as a budget resolution. The budget was due this year on April 15, 2002, and to meet this deadline, President Bush offered his budget plan last February. And the House of Representatives passed its budget in March.

The Republican staff director of the House Appropriations Committee announced on Monday that the House of Representatives was in a “stand down” mode. Congress is just over two weeks away from its scheduled final adjournment, and not one of the annual appropriations bills has been sent to the president. The Senate hasn’t even passed a budget resolution. And they are in a “stand down” mode?