Taxes, Health Lead Hill Agenda
After Iraq Fight, Both Parties Welcome Shift

By Jonathan Weisman
Washington Post Staff Writer
Monday, October 1, 2007

Out of a political stalemate over Iraq, domestic policy is surging to prominence on Capitol Hill, with Republicans and Democrats preparing for a time-honored clash over health care, tax policy, the scope of government and its role in America's problems at home.

The brewing veto fight this week over an expanded children's health insurance program is only the most visible sign of the new emphasis on domestic issues. Democratic White House hopefuls are resurrecting a push for universal health care while talking up tax policy, poverty and criminal justice. Democratic congressional leaders are revisiting Clinton-era battles over hate crimes and federal funding for local police forces.

The White House, at the urging of congressional Republican leaders, is spoiling for a fight on Democratic spending. And GOP leaders are looking for any opportunity for confrontations on illegal immigration and taxation.

At the heart of it all is a central question: Thirteen years after the 1994 Republican Revolution, has the country turned to the left in search of government solutions to intractable domestic problems?

Democrats think that the answer is yes. "As conditions deteriorate, Americans are asking, 'Who can make it better? Where can we look for help?' And not surprisingly, government is increasingly the answer," said Peter Hart, a Democratic pollster.

Even Republicans see a growing unease as the driving force in the domestic policy resurgence.

"There's no question the economy is good, but it's not a good for everybody," said House Minority Leader John A. Boehner (R-Ohio.). "When you look at family incomes, there hasn't been much rise. But there has been increased health-care costs, increased energy costs. They're nibbling up more than the family budget. It just drives more concerns."

For both parties, domestic policy fights are a welcome break after three election cycles dominated by terrorism and war. Republican and Democratic political leaders say they cannot shy away from the Iraq war. But for much of the year, the fight over the war has only shown Democrats to be ineffectual and Republicans to be intransigent.

For Democrats, a break in that fight could allow them to focus on issues that voters say demand attention. Last year's election victories by Democratic Sens. James Webb in Virginia and Jon Tester in Montana, and by Democratic governors in Arkansas, Colorado, Iowa and Ohio, show that a populist message can prevail even in swing states.

For Republicans, changing the subject is simply a relief.

"I think it is territory that tends to unite us more," said Senate Minority Whip Trent Lott (R-Miss.). "Republicans tend to squabble, but when it's fiscal issues, when it's economic issues, we tend to come together. That's what makes us Republicans."

If so, the GOP may be having an identity crisis. Boehner, Senate Minority Leader Mitch McConnell (R-Ky.) and President Bush have met regularly on what Boehner calls his "rebranding" initiative: winning back for the GOP the mantle of fiscal discipline and limited government.

But in the first big domestic battle on Capitol Hill, 18 Republicans in the Senate and 45 in the House abandoned their leaders to side with the Democrats on a five-year, $35 billion expansion of the State Children's Health Insurance Program.

House Republicans are expected to muster enough votes to sustain Bush's anticipated veto of the SCHIP bill, but Boehner conceded that Congress is liable to override the promised veto on a $21 billion water-project bill so crammed with home-district projects that it has been denounced by taxpayer and environmental groups alike.

"There's deadlock on Iraq. Bush is intransigent. It's clear we're not going to get the 60 votes to change course on the war. But Republicans are hurting too, so they're breaking with him on all these domestic issues," said Sen. Charles E. Schumer (N.Y.), chairman of the Democratic Senatorial Campaign Committee.

Indeed, on the domestic front Republicans may be in the same bind that they face on foreign policy: Their conservative base is not where the rest of the country is.

For more than a decade, the Democratic polling firm Hart Research and the Republican firm Public Opinion Strategies have read two propositions to Americans: "Government should do more to solve problems and help meet the needs of people" and "Government is doing too many things better left to businesses and individuals."

In December 1995, at the height of the Republican Revolution, a less-intrusive government won out, 62 percent to 32 percent. This month, a more activist government won out, 55 percent to 38 percent. Independent voters sided with government activism, 52 percent to 39 percent.

But Republican voters, by a margin of 62 to 32 percent, still say government is doing too much.

"The big tectonic plates of American politics are shifting, and the old Republican policies of limited government aren't working like they used to," Schumer said. "Their problem is, the Republican primary vote is still the old George Bush coalition -- strong foreign policy, cut taxes, cut government, family values. But Americans aren't there anymore."

But the same poll did find some hope for the GOP, said Neil Newhouse, a partner at Public Opinion Strategies. Americans said they do not see a role for the federal government in the current mortgage crisis.

"Americans seem to be saying that the problems the country is facing demand a more activist government, but that this does not extend to all issues or every problem," Newhouse said.

That's a difficult needle to thread, but it can be done, said former senator Jim Talent (R-Mo.), a top domestic policy adviser to Republican White House hopeful Mitt Romney. Then-Texas Gov. George W. Bush showed in 2000, with his stand on education and his general slogan of "compassionate conservatism," that Republicans can win on traditional Democratic turf. They can do that again, especially on health care, Talent said.

"Part of what is at the core of the party is smaller government, fiscal restraint," said Sen. Mel Martinez (Fla.), general chairman of the Republican National Committee. "But like in this debate on SCHIP, it's very important that we as Republicans make it clear we are for insuring children."

"It's no longer permissible for us to think 47 million Americans being uninsured is okay," Martinez said.

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