Small-Government Democrats

August 28, 1996

THE DAILY FED

Small-Government Democrats

The last time Democrats were this united, and this optimistic, was in 1964, when they nominated Lyndon B. Johnson and Hubert H. Humphrey and went on to a smashing victory. But in 1964, Democrats were confident about what they stood for: civil rights, the Great Society. In 1996, it's not so clear.

The Democratic Party became a victim of its own success. In the 1930s, the New Deal proved that the power of the federal government could be used to promote economic justice. In the 1960s, the civil rights revolution proved that the power of the federal government could be used to promote social justice.

Even Republicans pay tribute to those triumphs. In his January 1995 inaugural speech as Speaker of the House, Newt Gingrich of Georgia lauded President Franklin D. Roosevelt for bringing the country hope and acknowledged that liberals had been the leaders in the drive for civil rights.

What happened?

Very simply, a collapse of confidence in government. The percentage of Americans who say they trust the federal government dropped from more than 60 per cent in the 1950s to less than 20 per cent today. The failures of the 1960s, followed by the economic crises of the 1970s, created a wall of cynicism. We can't rely on government anymore, Americans concluded. Politics has become the enemy of problem-solving.

The New Deal and the Great Society created two great entitlement programs --programs that enabled Americans to claim benefits as a matter of right: social security and medicare. President Clinton tried to build on that legacy with his plan for universal health insurance--``Health care that's always there, that can never be taken away.''

The goal was wildly popular, but the public turned against the program. It looked too much like big government. People were afraid that the plan would take what they already had and were satisfied with--their health care and their health insurance--and turn them over to the federal government.

What Americans wanted out of health care reform was security-- the assurance that they would not lose what they had. And guess what? They got it. Not in 1994, but this year, with the passage of the Kennedy-Kassebaum bill that Clinton signed into law last week. It's not universal health insurance, but it gives the middle class what it wants.

As for the uninsured, Republicans say they have the answer. It's the same answer they have for everything--economic growth. If more people have jobs, more people will have health insurance. No big government needed.

For Democrats, the failure of health care reform was an enormous blow. For the first time, a new entitlement was rejected. Not only that, but when Clinton signed the welfare reform bill, an old entitlement was ended, one that dates from the New Deal. Congressional Democrats could hardly have been more divided over welfare reform. In the Senate, 23 Democrats voted for welfare reform and 23 voted against it. In the House, the vote was 98 Democrats yea and 98 Democrats nay.

Can Democrats live with that decision? Yes. By 2-1, delegates here in Chicago said Clinton ``did the right thing'' in signing the welfare reform bill when CBS News and The New York Times polled them (60 per cent said he was right; only 28 per cent said he was wrong).

The delegates here are no less liberal than those at previous Democratic conventions. According to the CBS-Times poll, 43 per cent of the delegates call themselves liberals, a number that has held fairly steady (40-48 per cent) at every Democratic convention since 1976. But they are consciously endorsing pragmatism. Eighty-six per cent of the delegates describe Clinton as a moderate.

Does anything remain of the Johnson-Humphrey legacy? Yes. The safety net. When the Republican Congress threatened popular safety net programs such as medicare and medicaid, the Democrats' pro-government coalition, long given up for dead, suddenly came back to life. Women, labor unions and the elderly are rallying to the New Democratic cause: Protect the safety net. At the same time, the President reassures nervous taxpayers that he's cutting the size and cost of government.

The safety net was the message of actor Christopher Reeve's emotional appearance before the convention Monday night. He is a strong, talented and successful man who was brought down by an unexpected catastrophe. If it happened to him, it could happen to anyone. The delegates responded with a standing ovation when Reeves said, ``America does not let its needy citizens fend for themselves.''

The New Democratic creed is: Don't try to sell more government. ``The era of big government is over,'' Clinton declared in his State of the Union address this year. But keep what works.

Medicare works. Keep it.

Welfare doesn't work. End it. But make sure you preserve the safety net for the poor by other means. The Administration has pledged to preserve medicaid, restore food stamp cuts and create job incentives for the poor.

What about affirmative action? It doesn't always work the way it's supposed to. Fix it. In the President's words, ``Mend it, don't end it.''

The nation's new consensus is that the private sector, not government, must be the primary engine of progress and problem- solving. Both parties endorse that view. The only question is, does it operate with or without a net?

The danger is that the Democrats will spend so much energy defending the safety net that they will sound like the party of the status quo. Back in the 1980s, the Republicans were the dynamic party, the party of the future, the party of winners and bold entrepreneurs. The Democrats sounded like the party of the losers, those dependent on government. The Democratic Party will not thrive if it's just the Coalition to Save the Safety Net.

The Republicans have offered their bold plan for a high-growth economy. The Democrats have responded by portraying the GOP plan as risky. A big tax cut could drive up the deficit and overstimulate the economy, forcing the Federal Reserve to raise interest rates. The result could be to throw the economy into recession.

But do the Democrats really want to be the ``No Risks'' party? The slogan ``Safety First'' does not have much resonance in American political culture. That's why the pressure is on for Clinton to use his acceptance speech tomorrow night to offer a program that can compete with the Republican plan. A plan for growth, not just safety.