The budget as a political pivot

THE perils of Gramm-Rudman and of overall Washington budget policy certainly deserve attention on economic grounds. But it's also worth remarking that the 1986 budget debate will have an enormous impact on United States politics. It could even be the major near-term cockpit of realignment (or nonrealignment) of the US party system. The immediate tactical considerations are well understood. Democrats are taking care not to sound too eager for tax increases to avoid spending cuts. And most Republicans are quite aware, in turn, that while the public may applaud deficit reduction, it won't cheer overenthusiastic gutting of popular programs.

But the larger national political stakes of current-day fiscal maneuvering have commanded less attention. Some 15 months after the 1984 elections, Republicans still hold a slim lead in public perception of their ability to deal with US macroeconomic policy -- keeping the country prosperous, controlling government spending, and the like. In this regard, they profit from continuing economic recovery. The GOP edge, however, has narrowed since the months immediately after the President's 1984 landslide. The Gallup Organization has reported a steady 1985 decline in the percentage of Americans choosing the GOP as the party best able to handle America's most pressing (largely economic) problems.

One reason for this deterioration is that although ongoing recovery has kept the GOP in the plus column on general economic performance, support has declined for specific Republican positions on economic issues. Trade and agricultural policy come to mind. Polls show that Americans favor a tougher trade policy and a more generous approach to farm distress. And voters hurt by trade and farm policies have been moving away from the Republicans.

Since December evidence has been mounting that the Republicans have also lost their early 1985 dream of using tax reform to trigger party realignment. December's brouhaha in the House of Representatives, when GOP legislators turned against tax reform and Democrats were the ones who pushed it through, rewrote what was always a very shaky GOP equation. The Democrats' House-passed bill is arguably adverse to business and US international competitiveness, but it has more public appeal than the alternative Reagan proposals. New Louis Harris polling shows the Democrats with a solid lead over the Republicans on the tax reform issue.

Economic ideology provides the common denominator of how the GOP has dissipated the partisan opportunity existing in the wake of the November 1984 election. The first months of President Reagan's second term produced an impolitic insistence by the administration on laissez faire agricultural, trade, and currency management, support for mergermania and desire to strip special social and economic objectives, deductions, and credits from the tax code. And a similar mind-set still permeates the President's new budget proposals to curb the federal government's domestic role by slashing dozens of middle-class programs. For many voters, it is simply too harsh.

These reactions are a key factor in the 1985-86 decline of Republian voter identification. Published statistics confirm the shift. After the 1984 elections, GOP survey-takers Dick Wirthlin and Bob Teeter frequently contended that the Republicans had passed or were about to pass the Democrats. Now, conceding that the GOP has ebbed a bit, they insist they are neck and neck.

Some major public polls did show the GOP closing in on the Democrats back in early 1985, but that's no longer the case. The latest Gallup poll contends that the Republicans peaked in early 1985, when 37 percent of Americans called themselves Democrats and 35 percent called themselves Republicans. By December, the Democrats had regained a 40 percent to 33 percent lead. Similarly, the latest (January) CBS News/New York Times poll shows the Republicans slipping and party identification returning to 1981 levels -- 37 percent Democratic and 29 percent Republican. Last fall, Harris had already gone on record calling GOP gains ``marginal'' and that saying Democrats still held a 41 percent to 30 percent lead nationally. And Daniel Yankelovich, polling for Time magazine, said that Republican gains fell short of realignment and that as of September, Democrats led the GOP by 44 percent to 31 percent.

Polls at the state level further document this slippage, especially in Dixie and the Farm Belt. Democratic officeholder changeovers to the GOP have slowed to a trickle, and now there is some trend the other way.

This is more than coincidental, and the budget debate may be pivotal in where party preference goes from here. Should the White House continue its overinsistence on curbing accepted economic functions of government, the Republican erosion will probably continue, too.

Kevin Phillips is an author, commentator, and publisher of The American Political Report.

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