‘93/’94 Year-End Review and Outlook : BUSINESS PULSE / JOHN BRENNAN : No. 1 Concern of Voters: Deficit?--No, It’s Jobs

Pressures for deficit reduction have virtually quashed Bill Clinton’s flirtation with a more activist economic policy. Since the demise of the middle-class tax cut, the President’s economic program has lurched steadily to the right, nudged along by a Congress seemingly obsessed with budget cuts.

That may or may not be good economics, but it’s risky politics for a Democrat. Elected with a populist jobs-and-growth message, Clinton reneged on part of that platform immediately and is shelving more of it as time goes on. White House economists now pin most of their hopes for sustaining the recovery on the low interest rates that deficit reduction should buttress--provided the Federal Reserve Board continues to goes along.

The political question for 1994 and beyond: Will the middle- and working-class voters who put Clinton in office be on board?

Deficit reduction is a doubtful political bet. Since the early ‘80s, Congress has wrestled with any number of budget-cutting plans. The public has given lip service to the effort--then made economic judgments on other factors. If the deficit really mattered to Americans, Michael Dukakis would be President today, having succeeded Walter Mondale in office. Both candidates railed against Reagan-era budget shortfalls, reaping little for their efforts.

Sluggish economic growth--not the deficit--beat George Bush and elected Clinton in 1992. The small number of deficit-driven voters backed Ross Perot, not the Democrat. But even Perot supporters were more concerned with the overall economy and jobs than with getting red ink off the federal ledger, according to Times exit polls taken Election Day, 1992.

Americans claim to care about the deficit: 67% told Gallup last August that it was a “very important” issue. Just before Clinton took office, more than seven in 10 in the Times Poll agreed that people like themselves would have to make economic sacrifices in order to cut the debt.

But when push comes to shove, minds seem to wander.

There is little apparent connection between the size of the federal debt and all-important levels of consumer confidence, for example. As for taking strong medicine, 1993 polls showed Americans unwilling to stomach specific new deficit-reducing taxes.

Experts differ over how much the deficit hurts the economy. So it shouldn’t be surprising that the public is confused. Americans can feel job loss, taxes, tight credit and inflation. But the deficit never laid someone off, turned down a loan or repossessed the den furniture, at least not directly.

Like a dull toothache, the deficit instead annoys Americans--but not enough to call the dentist. The public agrees that it harms the economy, but even here shows ambivalence. Poll after poll finds job creation uppermost in the public’s mind.

Then why do so many in Congress demand a root canal? Strong--rather than mass--opinion plays on Capitol Hill. Deficit hawks are an ornery, affluent bunch, and there are enough of them to raise Cain in those town hall meetings.

Clearly, the deficit is a sign of disarray, and it fuels the public’s broad mistrust of government in general. With confidence in Congress so low, many think the public wants a house in order before trying any fancy new economic schemes. That’s partially right. Only 45% of Americans agree that “government should get involved in trying to help business create jobs and compete productively,” Times polling has found. Half think government should keep its hands off.

Still, Americans seem more receptive to new programs than many might think. In Times polls last year, three-quarters said they favored Clinton’s national service plan; 54% backed his proposal to boost food stamps and tax credits for the working poor. Eight in 10--including most Republicans--liked his economic stimulus package, killed off in April by a GOP filibuster.

The public is even sympathetic to spending the savings from entitlement cuts on new programs. When the Wall Street Journal-NBC News poll asked Americans if Medicare-Medicaid cuts should go for deficit reduction or directly into national health care, 70% opted for the latter.

It’s true that consumer optimism and the public’s view of Clinton have improved over the last few months, but that’s hardly because of deficit reduction. Between June and December, Clinton’s economic approval score rose 14 points. At the same time, the share that felt he could bring about real deficit cuts actually fell from 38% to 31%, despite the passage of his budget plan. The share that called the deficit the nation’s top problem also declined to 5% last month, from 15% the year before.

Recent statistics point to a better economy, but it’s far too early to describe things as healthy. Despite improved spirits, Americans remain doubtful that jobs are being created--and California, of course, still is mired in a gloom all its own.

Bill Clinton was elected because voters expected economic growth, not just deficit reduction. Wall Street may consider those congruent, but the Democratic voter base begs to disagree: As the President’s ratings rise, they seem to be lagging with working-class Americans. Maybe it’s time to rehang that famous campaign sign, with just a little editing so it reads, “It’s jobs, stupid.”