Buchanan Spurs Congress to Act on Economy

Returning to Washington for the first time since Patrick J. Buchanan rocked the national political debate, Republican and Democratic leaders in Congress scrambled Tuesday to push measures that respond to the economic anxiety of voters he has won over with his populist rhetoric.

House Majority Leader Dick Armey (R-Texas), in a speech billed as a major economic address, blamed President Clinton for the decline of workers’ wages and recast much of the Republicans’ floundering legislative agenda--including tax cuts and regulatory relief--into a prescription for curing the economy’s ills.

Democrats leaped to reclaim the issue as their own. Yet even as they denounced Buchanan’s policies, they applauded him for defining a critical issue. “Candidate Buchanan is really forged of our own failures . . . for he has at least recognized the crisis of falling wages and incomes,” House Minority Leader Richard A. Gephardt (D-Mo.) declared in a speech.

The political maneuvering after a three-week congressional recess showed how much impact the insurgent Republican candidate has had away from the presidential campaign trail. Widespread voter anxiety about job layoffs, stagnant incomes and a growing gap between rich and poor has fueled Buchanan’s unexpectedly strong showing in early primary contests--much as those issues boosted Bill Clinton’s candidacy four years ago.

“I think Buchanan has identified a serious problem in American society,” said Sen. John McCain (R-Ariz.), who has endorsed Sen. Bob Dole (R-Kan.) for the GOP nomination. “I violently disagree with his solutions but what he has done is a significant contribution. It was not being addressed by either party or the president.”

The Buchanan surge comes just as congressional Republicans are at a crossroads. With their yearlong drive to pass a budget-balancing plan in a shambles, GOP leaders are trying to plot a new course for the rest of the year. They are trying to salvage parts of their agenda during the next few weeks, when Congress will be moving legislation to raise the government debt ceiling and extend government spending authority.

Having lost much of their appetite for confrontation on the budget, Republicans are now debating how to design a plan of tax cuts and spending curbs that could be approved by the White House. White House Chief of Staff Leon E. Panetta met with GOP officials Tuesday to begin negotiating a compromise spending bill for the rest of this budget year.

House Speaker Newt Gingrich (R-Ga.) said he remains optimistic that Congress and the White House can reach agreement on a balanced budget in the next two weeks.

“It seems to me that the economy is clearly weaker than they hoped it would be, that they have a big incentive to get something done to help the economy grow,” Gingrich told reporters.

A recent memo by Gingrich made plain that GOP leaders in Congress wish to exploit the smoldering economic frustrations that have helped fuel Buchanan’s rise. Writing to Republicans earlier this month, Gingrich called on them to recognize economic insecurity as a powerful force that has influenced primary voters this year.

“Economic anxiety is a reality and we must be prepared to show that we recognize that reality . . ,” Gingrich said. “We must be prepared to communicate our response to legitimate voter anger in a clearer and more forceful manner than we have done so far.”

Without citing Buchanan by name, Gingrich pointed to basic facts that have made voters receptive to the Republican candidate’s message. Last year, wages and benefits crept up by the smallest amount in 14 years, and, overall, hourly wages for workers with high school educations fell between 1979 and 1994.

Such realities, Gingrich said, have prompted Republicans to support tax cuts for families, tax incentives for business to create jobs and a balanced budget to reduce interest rates for home and other loans. The speaker blamed the “failing Clinton economy” for much of the woes, and appealed to his GOP counterparts to resume their bid for a range of tax cuts, budget limits, regulatory changes and other measures this year.

Among New Hampshire primary voters, 27% named jobs and the economy as prime concerns and another 21% pointed to taxes, Gingrich said.

Armey elaborated on those themes in his speech at the Heritage Foundation, a conservative think tank in Washington. “Families today are caught in the Clinton crunch, squeezed between falling incomes and rising taxes,” Armey said.

He laid out a nine-point GOP agenda to address those problems--a wish list that departs in some ways from the 10-point “contract with America” that guided Republicans last year. That conservative manifesto included many issues such as legal reform and the line-item veto that some saw as remote from the lives of working Americans. Even in pushing the popular issue of balancing the budget, many analysts said, Republicans suffered politically because they did not adequately explain to voters the pocketbook benefits of that goal.

Armey’s agenda includes many of the same issues as the contract but they are recast more explicitly as ways to improve the lot of working Americans: capital gains tax cuts to create jobs, streamlining regulations because they stifle wages, consolidating job training programs to “put power in the hands of workers.”

Gephardt’s speech arose, in part, from frustration by the Democrat that his own trade policies had been compared to Buchanan’s by Republican free trade advocates, aides said.

Gephardt, who ran unsuccessfully for president in 1988, was at pains to distinguish himself from Buchanan by saying that he wanted only to ensure fair trade competition, not wall off American markets. But he tipped his hat to Buchanan for decrying the decline of American living standards.

“As a member of Congress, and even as a presidential candidate eight years ago, it has been enormously difficult for me to focus attention on these issues,” Gephardt said. “But in the past few weeks, Republican primary voters put this issue at the front and center of our political discourse--and this time we ignore them at our peril.”

But Gephardt blamed profit-hungry corporations and a loophole-ridden tax code rather than the Clinton administration’s policies for the economic woes. He offered proposals very different from Armey’s: Eliminating tax breaks for corporate leaders who lay off workers, expanding education and training opportunities, cutting taxes for the middle class and convening a high-level meeting of business, labor and government officials to determine how best to restore economic growth.