Top Videos
Related Topics
budget
economy
election 2006
2008 Polls NationalIowaNew HampshireGeneral Election
GOP | DemGOP | DemGOP | DemHead-to-Head

Send to a Friend | Print Article


Shrinking Deficit Good Economically but Means Little Politically

By Peter Brown

The federal deficit, regardless of its importance in the economy, has always been an ineffective political issue. Candidates who focus on getting rid of it generally lose, and those who win just give lip service to its elimination.

Although talking heads on Wall Street and in D.C. love to gab about how a large deficit spells impending doom for the U.S. economy, the issue has never been a big one at the voting booth for most Americans.

It's why the Democratic attacks against President Reagan and both President Bushes, for adding to the deficit by cutting taxes have pretty much fallen on deaf ears among most of the electorate.

Or at least the 99 percent of Americans who are not economists.

By the same token, however, the news that this year's federal deficit will be only about two-thirds the original forecast, and on a percentage basis one of the lowest in the Western world, is unlikely to much help this President Bush, or Republicans, come November.

When Americans tell pollsters they are worried about the economy that means they are concerned about their job, or the price of everything from health care to gasoline. The issue of the federal deficit ranks way down on the list of their concerns.

That's because the deficit isn't something that consumers can feel or touch.

True, economists firmly believe that there is a deficit number - although no one is sure what exactly that figure is - at which the economy would suffer because too much interest on the debt will deprive business of investment capital and lead to layoffs.

But voters care mostly about the here and now, not what might be coming down the road.

And even though the new deficit projections say the large increase in federal tax revenues is due primarily to increased collections from the wealthy, that isn't likely to make much of an impression on the electorate either. (The increase seems to have come from those with money buying and selling more financial assets. Even though the tax rate is lower, the resulting increase in volume of transactions created the tax windfall.)

Most voters believe that the rich don't pay their fair share in taxes, although, in fact, even before the latest numbers, federal figures show that the wealthiest 1 percent of Americans pay more than a third of all federal taxes. The top 5 percent shoulder more than half the overall burden.

Whether that is fair or not, the politicians will surely debate.

The point is that the shrinking deficit and increase in taxes paid by the rich is one of those stories that is likely to have little, if any impact, on the November elections.

Just because, at least for now, Bush has been able to fulfill his re-election campaign promise to lower the deficit, doesn't mean that his Republicans standing for office this November are in any better shape than they were a few weeks ago.

And even though the new data might suggest Democrats are wrong in charging that the Bush tax cuts are a giveaway to the wealthy to the detriment of the country, they'll probably drop that line when it snows in Miami.

All this is to say that there are stories out of Washington that are important - and the reduction in the deficit obviously both meets that criteria, and is good news for the economy's future health.

But don't let the spin-meisters tell you this big reduction in the deficit will be a boon for Republican fortunes come November. It may sound nice, and logic might argue for that being the case. But it just ain't so.

Peter A. Brown is assistant director of the Quinnipiac University Polling Institute. He can be reached at peter.brown@quinnipiac.edu

Email Friend | Print | RSS | Add to Del.icio.us | Add to Digg
Sponsored Links

Peter Brown
Author Archive