Looking Ahead To 2004

By Josh Tyrangiel

Punch-drunk. Terry McAuliffe must have been punch-drunk. After seeing a Republican President gain congressional seats in a midterm election for the first time since 1902, the Democratic National Committee chairman offered a woozy bit of spin: "I could make the argument that George Bush should have done a lot better last night." McAuliffe was not the only one finessing the results. "This country is still in the upheaval of 9/11," said dethroned Senate majority leader Tom Daschle. "The war in Iraq, the North Korean situation--all of that probably precluded us from having the opportunity to break through with the issues we wanted to talk about the most."

It's true that control of the Senate came down to a swing of just 41,000 votes in Missouri and New Hampshire. It's also true that those votes swung Republican, and in the minds of voters, the problem wasn't that the Democratic message was obscured but that the Democrats obscured it. After examining a postelection poll of his members, AFL-CIO president John Sweeney said they felt "neither party has a plan to strengthen the economy." But he added that "this is a particularly strong indictment of the Democrats. They needed to be crystal clear about what they stand for on issues of importance to workers--jobs, the economy, health care."

The message problem is endemic to Democrats. The party boasts a big tent, but that tent doubles as a big boxing ring, and in the weeks before the election every genus of Democrat--from the Southern pro-gun, antiabortion members of Congress to the Northern pro-choice, gun-control liberals in the Senate--duked it out over how to counter the President's agenda. Liberals argued it was time to get tougher with Bush on Iraq and the economy; moderates, many of whom backed Bush's war resolution and tax-cut proposal, argued it was time to get tougher on liberals. In the end the Democrats never got close to formulating a unified message. They simply failed to take their fight outside the tent.

The presumptive election this week of liberal San Francisco Congresswoman Nancy Pelosi to the House minority-leader post vacated by Dick Gephardt indicates that for now the party will lean left. But for some, ideology is less important than unity. "Democrats have to go forward with a sharp message," Massachusetts Senator John Kerry told TIME. "It's not a question of moving left or right. People want you to look them in the eye and tell them what you're for."

Which brings us back to the beginning. What are Democrats--all Democrats--actually for in 2002? Though some party leaders realized that campaigning on the economy got them nowhere--"No one has really felt the pain of the Bush economic policies yet," says Democratic Senate whip Harry Reid--many believe it's time to go after Bush's tax cut. "The economy is in shambles because of that tax cut," says Pennsylvania Governor-elect and former D.N.C. chair Ed Rendell. "We can translate that into things people understand: 'You're not going to get money you need for social services to make your life better. Why? Because they gave all the money away in a tax cut.' Find everything that people are concerned about, everything that they need from government in their lives, and attach it to tax cuts."

Party unity is aborning on health care. Since getting burned by the failed Clinton health-care plan in 1994, Democrats have focused on the micro-issue of prescription drugs for the elderly, which are not covered by Medicare outside of hospital stays. But in 2002 the G.O.P. countered with ads touting its own prescription plan; the two plans were so elaborate and confusing that even politicians had a tough time telling them apart. Conclusion? Broaden the message. "Look at the Democratic gubernatorial candidates who won," says Rahm Emanuel, a former top Clinton adviser elected to the House seat once held by Dan Rostenkowski. "They were all forward-looking, competent, pro-growth candidates, but they ran on health care and made it the center of the debate. Not prescription drugs but health care."

Even if Democrats pull together on some big issues, they'll still have to overcome G.O.P. bully pulpits in the White House and Congress--and a new reality: conservative bias in the media. "You've got a whole network [Fox News] out there that's banging for Republicans every day," says a senior elected Democrat. "They're No. 1 in the ratings, and they follow everything the President does all the time. How do you get around that?"

The answer may lie not in a Democratic message so much as a Democratic messenger. The race for the 2004 presidential nomination starts now, and after the ideological debacle of the midterm election, Al Gore is suddenly looking stronger. "He was uniquely forceful in his criticism of the President on the economy and foreign policy," says a major Democratic fund raiser, "and he is the only one among the potential candidates who has run a full campaign and knows what you have to go through to do it." Gore, who spent the weekend before the election campaigning for unsuccessful Florida gubernatorial candidate Bill McBride, seems determined to soften his wooden image. He has taped a Barbara Walters interview to promote his new book on families, Joined at the Heart, and will be host of Saturday Night Live in December. Gore has yet to declare himself a candidate, but few politicians would go through the ritual humiliation of an SNL appearance without a specific goal.

If Gore is best positioned for a postelection bounce, Gephardt and Daschle appear the most bloodied. The day after the election, when reality set in, Daschle conceded he had to carry the blame for Democratic losses in the Senate. "I can't shrug it," he said. "I can't shirk it." Sources say he will probably abandon a presidential run and focus on being Senate minority leader. As House minority leader, Gephardt spent most of the past decade trying to make up the 52-seat loss to Republicans suffered in 1994. "I've been consumed," he told TIME, "and I've wanted to win in the worst possible way." Gephardt narrowed the gap to six seats (it widened again last Tuesday), but he didn't win. And while his supporters say he's planning a presidential bid, he is hardly leaving his position on a grace note.

John Edwards, the Senator from North Carolina, was also hurt by the midterms. He campaigned hard for Erskine Bowles' unsuccessful Senate campaign in his home state, and now his own poll numbers look soft. "He's practically the only Democrat left standing in North Carolina," says a fund raiser who has considered backing Edwards in 2004. Edwards' Senate peer, Kerry, has fewer problems. He coasted to victory on Tuesday, and his criticism of last year's Tora Bora battle in Afghanistan, which failed to capture Osama bin Laden, and his credentials as a Vietnam War hero give him an edge. Kerry is a ferocious campaigner, and his wife Teresa Heinz is the widow of the late Senate Republican and Heinz ketchup heir John Heinz, giving Kerry access to a considerable campaign war chest.

Money will matter more than ever in 2004. The McCain-Feingold Campaign Finance Reform Act means that soft money is out and donors are limited to $25,000 gifts to the party, well below the typical $100,000 from high rollers in the '90s. Despite his implausible spinning following the election, McAuliffe looks destined to stay on as D.N.C. head because no one else in the party can approach his skill at opening up checkbooks. To raise $100 million in hard money, McAuliffe says he will borrow a Bush campaign tactic and ask fat cats to collect $100,000 in $25,000 contributions from friends and colleagues. "If we don't replace the $100 million in hard money," says McAuliffe, "we're dead." One potential hurdle is the fury of Hollywood donors. Heavy hitters like Hollywood producer Steve Bing (who gave $5 million to Democrats over the past two years) told party fund raisers they were so fed up with what they perceived as the Democrats' appeasement of Bush that they won't continue to fund many candidates.

Still, new restrictions on spending could actually work for Democrats in their quest for the White House. Money will be hard to come by between the crucial primaries in early 2004 and the July convention. "You can't afford to squander much on an internecine battle," says John Merrigan, chairman of the Democratic Business Council during the Clinton years. "People like Kerry and Gephardt, they get it. They'll still be competitive, but they'll be positive. If they aren't and they waste cash early, Bush and Rove will do to Democrats what Clinton did to Dole in '96." Or it could be 2002 redux. --With reporting by Matthew Cooper, Viveca Novak, Douglas Waller and Michael Weisskopf/Washington

With reporting by Matthew Cooper, Viveca Novak, Douglas Waller and Michael Weisskopf/Washington