Something Old, Something New

Something Old, Something New

One of the key similarities between politics and show business is that performers and officeholders can often extend their appeal by doing something different than what they are famous for doing.

Performers usually work on a new category of material. For example, Britney Spears releasing a CD of Frank Sinatra songs might be a bit surprising to her fans, but it might get others to think about her in a new way. Chances are her existing fans would still love her, while her new audience would be more inclined to buy her albums - or at least to allow their kids to go to her concerts.

Politicians usually do this type of thing by changing their position on an issue. When done skillfully, it often allows elected officials to appeal to a new audience. This audience most likely either didn't support them in the first place or drifted away after some initial enthusiasm. At they very least, these voters are no longer going, or allowing their kids to go, to campaign rallies for the politician in question.

This type of crossover can often be critical to the careers of both performers and officeholders because at some point the environment in which they are working changes. Protest rock stopped being relevant when the Vietnam War ended and after hippies turned into MBAs. Disco went from wildly popular to a joke on late-night television, and the Village People suddenly were seen only at reunion concerts. The perception of big box retailers has gone from suburban blight to an accepted way of shopping - so much so that designer Isaac Mizrahi now creates clothes for Target rather than just for New York runways.

And now the federal budget debate is going through a similar change. After more than two years of a more-or-less popular agreement that "deficits don't matter" and aren't worth worrying about, there are new signs almost daily that the red ink is having an increasingly negative impact - and that concern is growing significantly.

The Financial Times, a British newspaper with growing influence in this country, reported about a week ago that the various credit rating agencies are so worried about the size of the projected deficit and the additional debt it will require that they are seriously considering a downgrade to the U.S. credit rating. This would be an extraordinary step, and a sign that Washington's rosy statements about the budget and deficit are not being believed by the financial markets. It would also lead to the government paying higher interest rates to borrow than it is now doing.

There is growing concern on Capitol Hill about the deficit's impact as well. There are now clear indications that every fiscal 2004 appropriation - including those for the military and homeland security, which only a few weeks ago were seen as untouchable - will be smaller than they would have been if the deficit were not as high.

Most significant, for the first time since George W. Bush was elected president there is increasing political discomfort with the notion of more tax cuts. The projected fiscal 2004 deficit, which is now considerably more than $500 billion, has spooked so many House and Senate Republicans that the White House's plans to permanently extend the already-enacted tax cuts and propose additional reductions are in trouble.

Finally, the president's polling numbers have been falling steadily since he made his nationally televised speech requesting an additional $87 billion for military and rebuilding activities in Iraq. Even some of Bush's staunchest Republican supporters are raising public doubts about this request.

This dramatically changed budget environment provides the administration with a great opportunity to do the equivalent of releasing its own CD of unexpected material. The president has an excellent opening to appeal to a new audience if he views these changed circumstances as a reason to shift his positions on a number of fiscal issues.

The revised worldview would be simple: no new tax cuts, no permanent extension of tax cuts already enacted, and further limits on spending. President Bush would appear to be more fiscally responsible, and could keep his base in place while he appeals to a larger group of conservative Democrats on Capitol Hill and around the country. He would also remove a campaign issue that his Democratic challengers have been using with increasing success in recent weeks - one that will likely become even bigger as the deficit projections grow in the months ahead.

There are three dangers for the White House.

First, if the administration waits too long, it will appear to be reacting rather than coming up with the idea on its own. That would significantly decrease and perhaps even negate the value in making the change.

Second, if the president's revised position on the budget is too timid - or if it only asks others to make changes - he effort will simply focus further attention on the deficit issue. That could exacerbate rather than alleviate the White House's problems. This would happen, for example, if the president called for additional spending cuts without saying anything about foregoing further tax reductions.

Third, if the administration's position doesn't change soon, other Republicans may release their own CD of Sinatra songs. The White House could find itself challenged on the budget and deficit by both political parties - which would really reduce the number of people who attend the president's concerts next year.

(Happy fiscal new year everyone!)

Question Of The Week

Last Week's Question. Yes, as some of you noted, last week's question was at least a little bit cute because the answer was actually provided in the question itself. The Sept. 23 column read:

"Last week's question talked about OMB, which was created in 1921 as the Bureau of the Budget by the Budget and Accounting Act. This week's column talked about the General Accounting Office. The question: What year was GAO created?"

The answer? GAO was also created by the Budget and Accounting Act, so the correct response was 1921. There were so many correct entries this week (especially from people who work at GAO) that the judges felt there had to be two winners of "I Won A 2003 Budget Battle" mouse pads. Those winners, who were selected at random from the record number of correct responses received, are Sheila Mundy, who works for the FBI in Cincinnati and David Ferreira, legislative director for Rep. Joe Baca, D-Calif., in Washington.

This Week's Question. Google won't help you this week. The "I Won A 2003 Budget Battle" mouse pad will go to the person who completes the following with the best federal budget-related couplet:

Roses are red
Violets are blue
_______________
_______________

Click here to send in your response, which must be received by 5 p.m. PDT on Saturday, Oct. 4, 2003. Entries that do not include a mailing address will not be considered.

Note to government employees: Because of security procedures at many offices and facilities, your home address will be the best way to make sure the mouse pad actually gets to you.

COMMENTS

  • Stan is right. He even quotes a British paper. You guys like the Brits don't you? Look at the bottom line here, the national debt has been growing like a mushroom ($5 trillion) since Reagan started spending on the credit card and lowering taxes. Bush is doing the same thing and now the debt is over $7 trillion. Don't you get it? We can't afford to keep spending on the credit card without paying off some of the principle. Bush only wants to pay the interest and it's getting pretty big. Only one President has paid on the principle that I know of and we can't mention his name. But he did the right thing for the country. Ben, needs to look again, it is getting bad and we can do better.
  • Stan's display in his columns of overt politics continues to detract from his credibility, and that of GovExec.com . Stan just doesn't understand that the president may have thought through his tax reduction policy, and that for good reason he may be willing to live with deficits for awhile. Stan disagrees—fair enough—but he is able to cite nothing more to support his position than raw deficit numbers, opposition party mumblings and numerous "coulds" and "maybes." However, Stan let slip one sentence in his "Something Old..." column that is most telling: "There are now clear indications that every fiscal 2004 appropriation—including those for the military and homeland security, which only a few weeks ago were seen as untouchable—will be smaller than they would have been if the deficit were not as high." If Bush's wants to reduce government spending, it sounds like his policies might be working--not that Stan will ever concede that point, or even make the connection. Could we please have a guest columnist once in awhile to give us the pro side of the White House position, or is GovExec.com as politically biased as Stan seems to be?
  • The article assumes that tax cuts result in a net outflow from the government coffers. The whole purpose of tax cuts is to increase consumer spending which grows the economy which, in turn, increases tax revenues which exceed the amount of the tax cuts. Increasing taxes (equivalent to eliminating tax cuts) has been shown throughout history as a failed recipe for economic prosperity.

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