Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 18, 1993 TAG: 9302180089
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: DAVID SHRIBMAN KNIGHT-RIDDER/TRIBUNE
DATELINE: WASHINGTON LENGTH: Long
PRESIDENT FACES BATTLE FOR HEARTS OF MIDDLE CLASS
Now begins the most ferocious economic fight of the decade.With Wednesday night's speech before Congress and with the release of his economic game plan, President Clinton has spawned a classic political debate, challenged his rivals and, even perhaps - before a month has passed - put his presidency on the line.
The president's opponents will come from every quarter, region, income group and ideology. His battle will be with Republicans, conservative Democrats, special interests, older people, defense hawks, even New Englanders worried that the cost of heating their homes will rise to intolerable levels.
This is a battle about economic policy, to be sure, but it is really a gritty, cold-blooded political fight.
It is a struggle for the allegiance of the most important player in American politics, the middle class, and it will be fought and ultimately won over the most inflammatory word in American politics: taxes.
Republicans already are arguing that "putting people first," the slogan that Clinton used in the fall campaign, has been distilled to putting taxes first.
"Convincing the middle class on taxes is a real political minefield," said James Reichley, a Georgetown University political scientist. "He needs support from the middle class right from the start. And if he loses that group, the whole package is lost and you'll see massive Democratic defections."
But beneath the noise of battle, the issue is more complex. The tax increases Clinton seeks are not as severe as critics complain - and ultimately, they could reduce the overall social burden on the middle class.
Polls have shown the public is willing to contribute more tax revenues to pare the budget deficit, but the pollsters' questions, until now, were mere theoretical exercises.
Now it is a matter of real things: an additional 8 cents a gallon at the gas pump, greater taxation of Social Security benefits, the possibility (perhaps more threat than reality) that medical service levels and quality of care could fall.
From the start, Clinton pitched his campaign and his administration toward the middle class. The day he stood before the antebellum Old State House on the Arkansas River to announce his campaign for the presidency, he used the phrase "middle class" a dozen times. He accepted the Democratic presidential nomination "in the name of the hard-working Americans who make up our forgotten middle class."
The problem for the administration is that middle-class taxpayers, who were told by candidate Clinton that they deserved a tax cut, now are being told by President Clinton that they must join in a tax increase.
"Clinton is about to radicalize the middle class," said Frank Luntz, a Republican pollster who was Ross Perot's research director. "Now that silent majority is about to scream and reject the tax increases. These people think they've already sacrificed and can't do it any more."
But though it is true that taxes for all those earning $30,000 or more will grow, the increase will be biggest for the rich, especially for couples with taxable incomes of more than $140,000 and for individuals with incomes of more than $115,000.
The biggest pinch for the middle class will come in energy taxes. For most people outside New England, that pinch will sting but not cripple.
"The hit is there, it will be noticed, but beyond gasoline and heating oil, it will be kind of hidden," said Charles Schultze, who was Lyndon Johnson's budget director.
Even so, Clinton faces the task of selling the middle class on new taxes - albeit in small amounts - at a time when the Republicans, desperate for an issue, are sure to seize it.
Administration officials know the Clinton plan will be picked apart and left for dead if they relinquish the offensive and permit their opponents to dominate the debate.
The financial markets provided a vivid demonstration of that this week. The day after Clinton talked about broad tax increases, the Dow Jones industrial average dropped nearly 83 points, the biggest one-day plunge in 15 months. Wednesday, the markets were substantially more stable.
So it is not surprising that conservatives are determined to frame the budget as a huge fight on taxes. "People want to do the right thing, but how much more can they bear?" asked Scott Hodge, lead theorist on deficit reduction for the Heritage Foundation, the conservative think tank.
The Reagan years showed the political potential of the word "taxes," and Clinton's challenge, not only Wednesday night but in the days and weeks to come, is to shift the fulcrum of the debate from the notion of new taxes to the notion of a new burden, falling heaviest on the wealthy.
He must cut through the static of the tax debate to make the case that his budget also is a plan to achieve social goals that have the support of much of the middle class.
The adjustments he plans to make in the earned income credit, for example, will have the effect of providing incentives for poor people to work rather than to accept welfare payments or other federal support disbursements.
The result could transform the nation's social-spending practices and to alter generations-long patterns of welfare dependency - as well as to spur economic growth and cut the deficit.
In the end, the middle class will decide not only the fate of this plan but the fate of the Clinton administration.
"The only thing about this plan that may matter," said Harrison Hickman, a Democratic political consultant, "is whether it worked or not."