Federal Deficit Could Be Political Issue in 2004

Members of both parties say record federal deficits are showing signs of evolving into a powerful political issue, fed by voter concern over the size of President Bush's $87 billion request for Iraq (search).

Bush was formally sending his request to lawmakers Wednesday, and bracing for the debate it was sure to ignite. "There will be lot of discussion, I'm sure," White House spokesman Scott McClellan said. "We just hope members will move forward quickly on this package."

Until now, voters have paid little attention consecutive years of budget surpluses abruptly morphed into shortfalls now expected to soar beyond $400 billion this year and next. Public attention instead has been focused on the economy, wars in Iraq and Afghanistan (search) and the threat of terrorism.

Now, however, people seem to be paying attention. Members of Congress returning home say they are hearing about deficits and Iraq spending from constituents, and recent polls show a growing discontent with Bush's handling of the economy and the budget.

"They're saying, 'You have a half-trillion-dollar deficit and you're asking for another $87 billion?"' said Sen. Sam Brownback, R-Kan. "That's a very high price."

The White House spokesman said Bush is confident that his request will pass.

"I think members recognize that it's important to move forward quickly with the request, because this is about providing all the necessary resources that our military needs to achieve their objectives," McClellan said. "And it's about providing the resources necessary to bring stability and civilitiy to Iraq as quickly as possible, and when that happens, then we can get our troops home sooner."

Underscoring that, a Washington Post-ABC News poll last week found Americans opposing Bush's $87 billion plan for Iraq and Afghanistan by 61-38 percent.

Sen. Evan Bayh, D-Ind., said the United States was "embarked on nothing less than nation-building in its most profound sense."

He said his constituents are asking "how is this equitable" now that the federal surplus is gone and the government is borrowing money to rebuild the Iraq economy.

Brownback said he has told White House budget chief Joshua Bolten (search) that the administration needs to publicly discuss specific ideas for reducing deficits. Brownback said he believes the administration will lay out such plans in about a month.

Bolten and other White House officials have said they believe there is little evidence that deficits are harming the economy. They say shortfalls can be halved in five years through economic growth and spending restraint.

Bush's Iraq spending package is expected to pass Congress overwhelmingly, with both parties flashing their support for U.S. troops. But sensing an opportunity, Democrats in Congress and those running for president have begun discussing the deficit with growing frequency.

They cite the Iraq spending request as an example of administration incompetence in running the economy -- perhaps the key issue on the horizon for 2004. They use it to challenge the wisdom of Bush tax cuts that have aggravated the government's long-term shortfalls, and link it to Bush's spending plans for Iraq as well.

"We are already facing a nearly half-trillion-dollar deficit, and American taxpayers deserve to know how this spending will affect our ability to address the unmet needs in our own country," House Minority Leader Nancy Pelosi, D-Calif., said Tuesday.

In an AP interview last week, presidential contender Sen. John Kerry, D-Mass., said he would oppose the $87 billion proposal without assurances that the administration will "put America in a stronger position" by raising funds for Iraqi reconstruction from U.S. allies.

Some GOP leaders say they are not concerned that deficits or the Iraq package will deal their party any political blows.

They say Americans understand that a recession and the costs of fighting terrorism forced the return of red ink after the four annual surpluses under President Clinton. Underscoring that, GOP leaders said the House would pass a bill this week increasing charitable deductions for many taxpayers -- and adding $12.6 billion to deficits over the coming decade.

"When you give people their money back, they grow the economy much better than the government does," said No. 3 House Republican Roy Blunt of Missouri, an author of the bipartisan measure. "The way to move out of the deficit is to grow the economy."

As the big deficits of the early 1990s faded into surpluses, polls showed concern about the budget registering in low single-digit percentages. Many pollsters even stopped asking about it.

But in late August, a Gallup poll for CNN and USA Today had people disapproving of Bush's handling of the deficit by 55-39 percent. Five months earlier, respondents were evenly split.

GOP consultant Neil Newhouse said a poll he conducted in late August had 7 percent of Americans listing the deficit and the long-term federal debt as the top problem facing the country. Only about 3 percent named it as the key issue at the beginning of the year, he said.

"Americans are obviously becoming aware of the cost of prosecuting the war in Iraq and defending themselves against terrorism," Newhouse said. "It's an issue that has moved from off the table to a back-burner issue."