Selling the Tax Cut

By JAMES CARNEY AND JOHN F. DICKERSON

Ben Nelson has been in the senate for all of two months, but he knows what the George W. Bush treatment feels like. Not just the win-a-little-nickname treatment (Bush dubbed him Nellie) but a far more punishing one--the kind that can make a politician sweat. A Democrat and former Governor of Nebraska, Nelson was onstage with Bush at the Omaha Civic Center last Wednesday when the President set about tickling the crowd of almost 4,000. Pointing out both Nelson and his Republican colleague, Chuck Hagel, Bush declared, "I know that when it comes to doing the right thing, they'll listen to the people of Nebraska." As the crowd roared and waved miniature American flags, Nelson turned his frozen smile to Hagel. "You haven't come out for his tax plan yet, have you?" he asked. "Well, no," Hagel said, laughing. "But is there any doubt I will?"

Nellie, you're on your own. The Senator won his seat last fall by the narrowest margin in state history. Bush, who crushed Gore by 30 points in Nebraska, was sending a clear message: a vote against the tax cut would be a vote against a President who was more popular in Nebraska than Nelson. It might even be political suicide.

That's the kind of candygram that Bush is delivering to more than a dozen vulnerable Senators--men and women who will make the difference in the coming battle over Bush's tax cuts. A small handful of Republicans could defect and the President will need to peel off an equal number of Democrats to ensure passage of his program. Last week, after delivering his big budget address to Congress, he swept into Arkansas and Georgia, where Democrats Blanche Lincoln and Max Cleland felt the love. This week Bush will swing through Louisiana and North Dakota, two more states he won handily--and where Democratic Senators hang on to their jobs by hewing to local opinion. Even Tom Daschle, the Senate minority leader, whose job is to rally the opposition, won't be spared. Bush plans to visit Daschle's G.O.P.-leaning home state of South Dakota this week.

To hear Bush describe his budget, you'd think Nelson and the others would all be jumping up and shouting "Hallelujah!" As Bush tells it, we can afford guns and butter, higher spending and lower taxes, missile defense and a prescription-drug benefit, Social Security forever. After a month that felt more like the ninth season of the Clinton Show than the first of Bush's, the new President's address last Tuesday had the air of a second Inauguration. In a real sense, it marked the beginning of his presidency, the moment when the new guy started filling his suit. The performance was, well, Clintonian in its easy embrace of the other party's ideas--more funding for education and health research, protection for national parks, even an end to racial profiling--headed up by John Ashcroft, no less.

The tone was so warm and comforting that you had to endure a fistful of paper cuts while going through Bush's 207-page budget blueprint to feel its chilly austerity. The document makes it clear that Bush's true inspiration is not Bill Clinton but Ronald Reagan--the last President to promise a mammoth tax cut. Bush's task is, if anything, more daunting than Reagan's was 20 years ago. The Gipper was elected at a time of mounting deficits with a mandate to cut government down to size--yet never came close to taming the beast. Bush avoids Reagan's sharp rhetoric and is governing without a mandate during a time of surpluses, yet he proposes to hold federal spending to a 4% increase overall, barely more than the rate of inflation. That sounds "reasonable and responsible," as he says, but in fact it is wildly ambitious, even radical. Congress boosted spending more than 8% last year, and even Republican committee chairmen can't imagine living on less than a 6% hike this year. "In the last couple of Congresses, everyone got drunk on a spending binge," says a senior Bush aide. "They scratched the President's back, and Clinton scratched theirs."

The idea of making hard choices--of cutting some departments deeply in order to free up money for others--is commonplace in the private sector, where Bush's lieutenants lately toiled, but the Capitol calculators have different buttons. In the past, those who have tried to bring real-world discipline to Washington have gone away dizzy. The White House insists this time will be different. Aides say Bush will veto any spending that busts his 4% cap.

The President's team knows how fierce the political battle will be. Bush has a lower approval rating than any other new President in 50 years. And after 18 months of selling his tax-cut plan, he has yet to inspire a national sing-along. So White House political guru Karl Rove is surveying his battle maps and strategic-planning calendars to orchestrate a multi-week sales tour mixing the hucksterism and pageantry of a presidential campaign with a strong undercurrent of blackmail. The focus is on the Senate, with its 50-50 split between parties (the House, Bush aides say, is a slam dunk). Six of the targeted Democrats are up for re-election in 2002. Says a gleeful Bush official: "These Senators are going to hear about it at home."

The idea, White House political director Ken Mehlman told a group of G.O.P. state legislators in a conference call last Thursday, is to re-create what happened during Bush's Inauguration speech. When the President mentioned his $1.6 trillion tax cut, politicians on the Capitol steps clapped politely. But out on the damp and muddy Mall, the crowd whooped and hollered louder than at any other moment of the speech. Hearing that, the politicians amped up their own applause. To turn up the grass-roots volume, Bush is getting help from groups like Americans for Tax Reform, whose founder, Grover Norquist, organized Mehlman's conference call. In coming weeks, Norquist promises, many G.O.P.-controlled state legislatures will vote to send resolutions to Washington directing their Senators to vote for the President's plan.

Some of the targeted Senators are fighting back. When Daschle heard that the President would be dropping in to his state, the minority leader challenged him to a tax-cut- and-budget debate on local TV. (Bush declined.) Democrats are eager to engage because their polls show that Bush had a strong night in his first presidential address. Bush's individual proposals are immensely popular, but he has been unable to assuage public fears that his numbers don't add up. Bush's tax cut, Daschle warned, "will consume nearly all of the available surplus--at the expense of prescription-drug coverage, education, defense and other critical priorities."

The skepticism is justified. Plenty of voters remember the dark side of Reagan's legacy--record deficits the country is still paying off. When politicians tell Americans they can have it all, they have learned to say, "There they go again." To counter that reaction, the President insisted all week that his budget sets aside $1 trillion of the projected surplus for "contingencies." But on closer inspection that contingency fund looks like a bottomless till, a way to pretend to pay for a host of Bush initiatives that will end up costing far more.

During the campaign, Bush rarely talked about debt reduction. But last week paying down $2 trillion of the national debt suddenly became one of his "major initiatives." The reason: internal polls told Bush strategists that the public wants debt reduction at least as much as, if not more than, a tax cut. "We knew we had to change the argument from tax cut or debt relief to tax cuts and debt relief," says a Bush aide. But although the President's rhetoric changed, his plan did not. He came up with no money for paying down debt beyond the Social Security payroll-tax revenues, which both parties have unanimously agreed should never be used for anything else.

Hoping to jump-start the economy, Bush is calling for part of his tax cut to be retroactive to Jan. 1--without factoring the added cost into his budget. Unless there is some tinkering, that will surely increase the cost above his cap of $1.6 trillion, which means Bush will have to decide where to compromise--by fiddling with the pace at which cuts take effect, reducing rates by less than he has proposed, or reducing rather than killing the estate tax.

But for now, compromise is looking less probable. Despite all the talk of changing the tone in Washington, Republicans and Democrats are back to their old spitting and bickering. Last week Republicans rammed a version of Bush's across-the-board income tax cut through the House Ways and Means Committee on a party-line vote. A full House vote is scheduled for this week. Even Democrats who appeared likely to support Bush were complaining that they had been railroaded into considering tax cuts before the budget had been hammered out or the program cuts even announced. Bush was pleased by the pace and hoped that the sense of momentum would put more pressure on fence-sitting Democrats and moderate Republicans. It may not. "He has to be willing to work with us," says Arkansas Senator Blanche Lincoln, another Democrat who got the Bush treatment last week when he visited Little Rock. "It can't be his way or no way."

--With reporting by Douglas Waller/Washington

With reporting by DOUGLAS WALLER/WASHINGTON