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ROBERT KUTTNER

Democrats asleep at the wheel

THE REPUBLICANS just did it again. They pushed through Congress a bankruptcy ''reform" bill written by credit card companies. The bill makes it harder for ordinary people crushed by debt (often medical debt) to start anew. It leaves intact dodges used by wealthy people, such as asset-hiding trusts, and the corporate ability to use bankruptcy to slash wages, evade pension responsibilities, and stiff creditors.

There's a larger story here. Time after time, Bush administration policies do real economic harm to ordinary people, yet the Democrats can't seem to turn that reality into winning politics. Why not? Other recent examples include:

Stealth Tax Increases. While the Bush administration has bestowed immense tax cuts on the richest 1 percent, the upper-middle class is getting socked by the alternative minimum tax. This provision was enacted to make sure that wealthy people did not avoid taxation entirely by piling up multiple deductions. But thanks to inflation, the tax now denies such basic deductions as local property taxes to some families making under $100,000 a year. It costs them more in higher taxes than Bush's tax cuts save them. Bush also raised taxes for low-income families by reducing the effective child tax credit. Yet another stealth tax increase is rising state and local taxes and changes, made necessary by Bush's reduced aid to states.

Surging Drug Prices. Bush's Medicare prohibits the government from negotiating bulk pricing discounts. Every national health plan in the world negotiates bulk discounts with US drug companies, but Medicare will pay retail. Excuse me, senior citizens will pay retail, because for most, the Bush program will pay less than half the cost of their prescriptions.

Rising Interest Rates. If you have credit cards, home equity loans, or just bought a house, you noticed interest costs going up. There's one big reason for that -- the increasing federal deficits that are mainly the result of Bush's tax giveaways to the very wealthy.

Children Left Behind. The Bush education bill imposed high-stakes testing on states and local school districts, but shortchanged the money to help teachers teach and children learn. Bush is also underfunding programs like Medicaid and the State Children's Health Insurance Program, leaving more working families without adequate health insurance.

The point is: Bush's economic program harms ordinary people. And a majority of voters notice.

A New York Times/CBS poll last week reported that 63 percent of respondents felt that Bush had different economic priorities than those of most Americans. A majority (51 percent) opposed Bush's Social Security privatization plan, and that rose to 69 percent when respondents were informed that the shift would cut the basic guaranteed benefit.

People understand what Bush is up to. So why are Democrats failing to turn this into a winning politics? Five reasons.

First, dozens of Democratic legislators vote with Bush, usually to curry favor with organized corporate business interests that write these bills (and campaign checks). Eighteen Senate Dems even voted for the bankruptcy bill. This blurs the distinction between the parties and leaves the impression that Democrats don't know what they stand for. Nobody wants to follow a wimp.

Second, center-right Democrats urge their party to avoid ''populism." But sticking up for the economic interests of ordinary people is not populist in the sense of class warfare. It's the essence of what once made Democrats the majority party. Nor is it ''antibusiness" to defend a fair tax system, adequate social outlays, and regulation to protect consumers and investors.

Third, Bush is a master propagandist, with tame or intimidated media eating out of his hand, while the supposedly liberal press bends over backward to be evenhanded.

Fourth, the cultural conservatism of many moderate-income Americans attracts them to Republicans who don't serve their economic interests. But cultural moderation will not save the souls of Democrats unless they start delivering the goods economically.

Finally, there's a war on, and people generally support a wartime president.

Democrats need to challenge Bush on the best strategies to keep Americans safe, but they are not maximizing their advantage on the pocketbook issues where they should be eating Bush's lunch. The one happy exception is Social Security, where Democrats have managed more unity than usual, and they may prevail. There's surely a lesson here.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.


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