Republicans on the Rocks Jude Wanniski April 17, 1996

For the first time since the GOP sweep in 1994, the political insiders are beginning to discuss the possibility of a Democratic sweep this year -- with President Clinton easily re-elected and the Democrats recapturing both houses of Congress. Certainly no one expects Clinton’s 17-point lead over Bob Dole in the latest polls to hold up. Yet a Democratic sweep would be realistic if Clinton won by 6 points. With a smaller spread, Democrats could recapture the House, but still lose the Senate. Bob Novak reports in his newsletter that the Senate Democratic Campaign Committee now predicts they will easily retake control. They need a pickup of three seats for a tie, which then would be broken by the Vice President, enabling the Democrats to organize the Senate. By his reckoning, Novak shows a net gain of only one Democratic seat, which would leave a 52-to-48 GOP split, but three seats are in the realm of possibility.

At the moment, it certainly looks bleak for the GOP, especially if Ross Perot’s Reform Party is added into the equation. The party now is expected to be on the ballot in all 50 states for the presidential race and more than 30 states for the congressional races. In most scenarios, the Republicans are pushed deeper into the hole by the Perot effort. House Speaker Newt Gingrich, having bet all his chips on a faulty misreading of the November 1994 mandate, now has no good options. The House vote Monday on a constitutional amendment to require a supermajority on tax increases was another in a string of pathetic public relations moves to rouse a disenchanted public. Gingrich now has been hoist by his own petard, with the White House using the latest rosy projections of the Congressional Budget Office to offer a balanced budget by 2002, without any cuts in entitlement programs or government reorganization. The administration has even indicated a willingness to accept a capital gains tax cut as part of the package, reducing the top rate for individuals in the lowest bracket to 10.5% and to 20% for all other individuals. The next step is for the GOP to refuse the offer, on some lame excuse, in order to prevent the President from celebrating achievement of the Republican budget-balancing goal by Democrats in a Rose Garden signing ceremony. The rule is that when you find you have dug yourself into a hole you should stop digging, but the Republicans continue to dig deeper.

Their leadership, which now is technically in Dole’s hands, will meet tomorrow to ponder the options. Dole should grab Clinton’s offer and have the GOP claim credit for making it possible, but his commitments to various interest groups may tie his hands. It now may not matter if the economy improves or strengthens between now and November; Clinton and the Democrats should have the advantage, having maneuvered to receive credit for strength and to blame the GOP for weakness. There really is little sign from Dole’s campaign that he has any game plan, although he expects one will emerge as Election Day draws near. Unless Dole hurries, Clinton may decide to makeover the Democratic Party as the party of economic growth. Felix Rohatyn’s “Recipe for Growth” on the Wall Street Journal’s April 11 edit page represented a true paradigm shift. Rohatyn, an opinion leader in the liberal Establishment and policy guru to many Democratic leaders, now concludes that the tax code should be aimed at growth instead of income redistribution. This is big stuff! Clinton cannot be far behind.

In this sense, we don’t even think it would be the end of the world to see a Democratic sweep in November. Long-time client Bob Lovell of First Quadrant observes that while Dole continually regresses to the mean of budget balance, Clinton turns out to be binary, a trial-and-error fellow who keeps moving closer to the right answers even though he must double back at times in the policy maze. He will be hard to catch.