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Economic Worries Aren't Resonating on Hill

By Jonathan Weisman and Dan Balz
Washington Post Staff Writers
Thursday, April 21, 2005; Page A01

Inflation and interest rates are rising, stock values have plunged, a tank of gas induces sticker shock, and for nearly a year, wages have failed to keep up with the cost of living.

Yet in Washington, the political class has been consumed with the death of a brain-damaged woman in Florida, the ethics of the House majority leader, and the fate of the Senate filibuster.

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The disconnect between pocketbook concerns of ordinary Americans and the preoccupations of their politicians has helped send President Bush's approval ratings on the economy down, while breeding discontent with Congress. The problem has yet to grow into a political wave that could sweep significant numbers of lawmakers from power next year, but both parties face risks if they fail to pivot their attention to economic issues.

"There is a lot of frustration," said Rep. Vernon Ehlers (R) on Tuesday, as he was returning from his district in western Michigan. Republican leaders "need some seats from the Midwest and Northeast to maintain a majority, and if we continue at the rate we're going, we may well lose a few seats."

Few economists would say the nation is at risk of slipping back into recession, but most believe the United States is back in a "soft patch." Inflation jumped 0.6 percent in March, the Labor Department said yesterday, the biggest price surge in five months. The 115-point plunge that followed the inflation announcement brought the Dow Jones Industrial Average to its lowest level of the year, 842 points below the height it reached in late December, when Wall Street rallied after Bush's reelection. An average gallon of unleaded gasoline cost $2.22 yesterday, 27 cents higher than election week.

Perhaps most important, wages are not keeping up with prices. Adjusted for inflation, average weekly earnings fell by 0.3 percent from February to March, the Labor Department reported yesterday. Inflation-adjusted hourly wages last month were a half-percent lower than a year ago. Real weekly earnings have not risen in four years.

"Pretty much all round, March now looks like a lousy month for the U.S. economy," J.P. Morgan Chase economists warned clients this week.

The Washington Post/ABC News Consumer Comfort Index, released Tuesday, climbed two points from last week's 2005 low, but it is still down seven points over the past month. Nearly half of those polled this month say the economy is getting worse, the most negative rating in two years of monthly polls.

"People feel vulnerable and besieged," said Lawrence Mishel, president of the labor-oriented Economic Policy Institute, "and they don't hear anybody talking about it."

Yet the only economic bills signed into law this year have tilted against the little guy: Legislation that restricts class-action lawsuits, and a major rewrite of the nation's bankruptcy laws, signed yesterday, that will make it harder for debt-ridden Americans to wipe out their obligations.

The Washington area has been insulated from some of the current economic problems. Gasoline prices here have risen as rapidly as elsewhere, but the area has a booming real estate market and strong job growth.

Beyond the Beltway, the real curiosity is why the economy has not become a more significant political issue this spring. One reason may be the media's preoccupation with other news: the deaths of Pope John Paul II and Terri Schiavo, and debates about the future of Social Security and the federal judiciary.

Another may be the degree to which partisanship rather than the actual state of the economy shapes attitudes toward Bush's performance. Republican pollster Bill McInturff said that attitudes about Bush are generally fixed -- with Republicans overwhelmingly supportive and Democrats overwhelmingly opposed -- and affected primarily by terrorism and security. Therefore economic changes have less impact on this administration than past administrations.

Still, there is evidence that the public may be paying closer attention to economic issues, particularly rising gasoline prices, than politicians in Washington realize. The most recent NBC News-Wall Street Journal poll found that gasoline prices ranked second behind Schiavo as the most closely followed story during late March.

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