Democrats Scramble to Capitalize on Shrinking Surplus; GOP Questions Strategy

Democrats feel the timing is right to turn up the heat on the Bush administration about the economy and tax cuts while focusing in Congress on social issues: health care, education, the environment.

Republicans say it won't work. President Bush's job approval is strong, they say, he's personally popular and the tax cut is just what the economy needs.

The opening the Democrats see comes after Bush's first six months, when the popularity of his mammoth tax cut appears to be on the wane. An internal party memorandum advises Democrats in Congress to pressure Bush and the GOP on how they will pay for education, health care, national defense and prescription drug benefits at a time the federal budget surplus is waning.

It's standard Democratic fare, but they think it could have more of an effect now.

"Bush inherited the greatest economic expansion in our history. In eight months, he's blown it," the Democratic national chairman, Terry McAuliffe, said Friday.

On Monday, Democrats will focus on the shrinking surplus and its effect on education budgets at 35 events in 25 states. They hope to link the shortfall to education, which has been Bush's strongest social issue.

"In order to have meaningful education reform you need resources," McAuliffe said.

The $40 billion in tax refund checks, along with the slowing economy, clearly affected the midyear budget outlook released by the White House this week. It estimated that the surplus would be just $1 billion more than what's already committed to Social Security.

"They are staking the campaign on tax cuts vs. Social Security," said GOP strategist Bill McInturff. "Democrats are doing something rational, but it's not going to work unless the economy tanks next year."

Bush professed no concern about attacks on his tax cut.

"The truth of the matter is, I welcome the tax debate," Bush said at a news conference in Crawford, Texas. "The counterpoint is, `What are you going to do, raise them?"'

Bush said the bitterly partisan tone that sometimes erupts in Washington doesn't reflect voter concerns in places like Crawford, where people worry more about the price of fuel, insurance rates and whether it's going to rain.

Democrats say their internal polling suggests Republicans are vulnerable on questions about the budget, the surplus and the economy. Bush remains personally popular, they say, but his popularity doesn't carry over to Republican positions on the issues or to congressional Republicans.

"Clearly, the economic grounds have shifted — from the tax cut to the vanishing surplus — and it's created an opening for Democrats to move on Bush," said Michael Meehan, senior strategist at the Democratic National Committee. The committee aired TV ads in a half-dozen cities this week that said Bush's budget raids Medicare and "violates one of Harry Truman's basic principles — protecting our seniors."

Florida Democratic Chairman Bob Poe said his party's message on the budget surplus is a way of saying: "We told you so."

Republicans countered with an argument on fiscal discipline.

"Democrats will say and do anything to keep their hands in the public trough, including buying ads to scare our elderly citizens on the future of their Social Security and Medicare," countered Republican national Chairman Jim Gilmore, Virginia's governor.

Rep. J.C. Watts, the No. 4 House Republican, circulated a letter Friday to GOP rank-and-file touting the lower 2001 and 2002 budget surplus numbers as "good news, not bad" because they will restrain runaway spending by Democrats.

Kentucky Republican Chairwoman Ellen Williams dismissed the new focus on the shrinking surplus and Social Security as "typical Democratic scare tactics."