McCainomics Beats Reaganomics

Budget cutting takes precedence over tax cuts with GOP voters.


One of the interesting tidbits from the Florida GOP exit polls concerned the economy, with 45 percent of Republican voters, according to CNN, ranking it as their most important issue. And even though Mitt "I have the economy in my DNA" Romney stressed the economy as his key issue and promoted himself as an economic expert due to his private-equity—I mean, "venture capital"—background, John McCain won those voters by 40 percent to 32 percent. (And 63 percent, BTW, described the economy as "not so good/poor.") Moreover, exactly half of voters, according to CBS, said they would prefer that the next president place "a higher priority on reducing the budget deficit than on cutting taxes." With those voters, McCain crushed Romney 40 to 27. With that as context, a few observations:

1) I think many voters now equate deficits with fiscal mismanagement, probably not differentiating much among the budget deficit, national debt, and trade deficit. Candidates who propose tax cuts with no plan to "pay for them" will meet with great skepticism. And McCain's rep is "budget cutter" while Romney's is "tax cutter." Voters seemed to buy McCain's theory that lower spending "is the path to lower taxes." (And indeed, taxes tend to get raised when deficits are big.)

The irony here is that Romney had by far the more detailed plan for both reducing the budget deficit and dealing with entitlements. This is also another sign that even though President Bush was unable to pass a Social Security reform plan, his message that the system is in fiscal trouble did get through. In this environment, Rudy Giuliani's multitrillion-dollar tax-cut plan looked implausible, even ridiculous.

2) When the economy was in full boom, many analysts wondered why people still seemed so sour on it. One possibility, put forward by my colleague Michael Barone, is that partisanship pretty much explained it all. Dems hated the economy because they hated Bush, while Republicans thought it was good. Basically, voters equated Bush with the economy. That day is over. Voters from both parties now think the economy stinks to high heaven, despite low unemployment.

3) McCainomics is supposedly about "small government" and fiscal responsibility. Yet here is his plan to deal with our $50 trillion in future entitlement liabilities:

As president, John McCain is prepared to make the tough, fair, and responsible choices that honor our promises to current beneficiaries and to our children. Every year these decisions are delayed makes meeting this responsibility more difficult and expensive. Promises made to previous and current generations have placed the United States on an unsustainable budget pathway. Unchecked, Social Security, Medicaid and Medicare obligations will grow as large as the entire federal budget is now in just a few decades. Without comprehensive bipartisan reform to America's entitlement programs, the nation will be unable to meet the challenges of providing vital medical and social security assistance to future generations.

If you're keeping score at home, that isn't really a solution but rather merely a diagnosis.