The Stimulus and Republican Rhetoric

President Obama is wrangling with Congress over the economic stimulus bill currently being negotiated. In addition to providing new information about Obama's management style, his influence, and his control over congressional Democrats, the debate has also revealed a new power center in the Senate: moderate Republicans and conservative Democrats.

After being purged in the 2006 and 2008 elections, there are not many moderate Republican congressmen and senators left. This leaves much more conservative minorities in the House and Senate. The Republican House minority unanimously voted against the first version of the economic stimulus bill, and Senate Democrats are counting on a small handful of Northeastern moderates to get a bill that could receive 60 votes.

In light of the vote in the House and the struggles Democrats are having in the Senate, Republicans are feeling emboldened. Even though they have very little legislative control, they are wielding a disproportionately large influence over the debate and are outmaneuvering the majority Democrats. As a result, support for the stimulus is waning. Political analysts are giving the Republicans credit for their current message.

The Republican economic argument is simple: The solution to the struggling economy is more tax cuts. Voters have heard these arguments before. By putting more money in people's paychecks because of lower tax rates, they could put that money back in the economy by spending it as they see fit. After all, they know how to spend their money better than big government does.

There are several problems with this argument, however.

1. A tax cut is useless to a person without a job. Given the rising unemployment rate, Republicans risk looking out of touch the more they push the tax cut issue. If you just got laid off, a tax cut will not put more money in your pocket at all. Republicans may argue that corporate tax cuts would allow them to hire more workers. However, when these companies were given billions of dollars of bailout money last fall, they did not hire more workers. They wasted the money on acquisitions, bonuses, and luxuries that turned out to be public relations disasters. Why would companies be more responsible taking advantage of a tax cut than they were with a gift from the taxpayers?

2. A company has no reason to hire more workers if demand is down. This dovetails from the point mentioned earlier. Republicans emphasize personal responsibility. It would seem that a responsible company would not increase their expenses at a time when their revenues are down. A responsible company would probably use any extra money to pay off debts or save it to cover expenses in the event of an emergency. Unlike former House Speaker Dennis Hastert's claims of laziness, people want to work. But companies have to have a reason to hire them.

3. Even though the argument sounds good, voters rejected it last fall. It is hard to argue with "putting more money in people's pockets." (From a public relations standpoint, the Democrats have a much harder case to make in terms of defending giving tax money to people who don't pay any income taxes.) However, Republicans up and down the ballot ran on the same argument and lost big for the second straight election. Voters are well aware of the Republican arguments concerning the economy, and they concluded in 2008 that they want new solutions. President Obama is not shutting Republicans out of the debate because they're Republicans; he's shutting out their ideas because tax cuts alone are not what the public wants.

Republicans are running on two issues right now: tax cuts and wasteful spending. It is true that support for the economic bill is waning. However, because of the three arguments listed above, Republicans have to be careful not to misinterpret their support. The tax cut argument probably doesn't play beyond the Republican base. Taxes will always be too high for them. Running against wasteful spending seems to be a much more potent issue for them. The Republicans' argument is definitely resonating with the public. The problem is, they are running the risk of stressing the wrong one. Voters might not be in lockstep with congressional Democrats or President Obama, but they do want "change." More tax cuts is not "change."