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  • GOP Reps. Ehrlich, Watts, McIntosh, Portman and Thune on the Republican tax plan.

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  • Politics of Debt Hits Voters at Home

    Rep. Don Sherwood (R-Pa.) visits state employees in his district. (Ed Boardman For The Washington Post)
    By Michael Grunwald, Juliet Eilperin and Will Woodward
    Washington Post Staff Writers
    Tuesday, September 7, 1999; Page A1

    "Y'all got a watch with a minute hand?" Rep. Ronnie Shows (D-Miss.) asked his audience at the local library in Tylertown, Miss. Really, he meant "second hand." But he'd done this watch routine at every stop of his district-wide bus tour, and he'd said "minute hand" every time, and he'd been rewarded with I-hear-you nods every time. So he wasn't changing a word.

    "Now, you watch that hand for one second," said Shows, 52, an easygoing freshman Democrat in a staunchly conservative district. "All right? Well, our national debt just increased $3,500. Okay, one more second. That's 7,000 bucks! Do you see where I'm getting at?"

    America's $6 trillion debt is supposed to be an issue lacking in political sex appeal, a classic Beltway-elite concern whose importance is lost on ordinary Americans. But in little southern Mississippi towns like Meadville and Monticello and McComb, when Shows suggested that Congress should start paying down the debt before it passes massive tax cuts, the farmers and welders and bankers who came to hear him seemed to see exactly where he was getting at.

    That was also true for the voters in Wisconsin's 1st Congressional District who came to town meetings to hear what their new congressman, Republican Paul Ryan, had to say, and for freshman Republican Don Sherwood's constituents around Scranton, Pa. As Shows put it, the seemingly dry issue of the debt is "a resonator" with average folk.

    With Congress in recess for the last month, lawmakers from both parties have been sounding out constituents about the $792 billion GOP tax cut package, which President Clinton has pledged to veto once it reaches his desk. National polls suggest that few voters are clamoring for such huge tax cuts, and in these three swing districts where freshman incumbents are expected to face stiff challenges next year, those polls seemed to have it right.

    Congress goes back into session on Wednesday, and with budget surpluses projected for the first time in years, members are expected to spend much of the next two months debating how much to cut taxes, and how much to boost spending. But if they are unable to work out a deal with the president, any surplus will automatically go toward debt reduction -- and that is fine with Tylertown librarian Ellis Barthe.

    "I'm in debt up to my keister, and so is everyone else I know; believe me, it keeps you from getting anything done," said Barthe, 48, who is struggling to pay for two children in college, medical bills for his bursitis, and $10,000 in credit card debts at interest rates as high as 21 percent. "I think it's the same way for the government. It's got to pay off what it owes, or else those markers are gonna get called in someday."

    Ronnie Shows comes off as a regular country guy, athletic and informal, a natural match for this down-home district. He found his calling in "guvment," serving for more than two decades as a circuit court clerk, state senator and highway commissioner. After Rep. Mike Parker, a Democrat-turned-Republican, quit Congress last year to run for governor, Shows narrowly won his seat by running as a conservative "Blue Dog" Democrat, antiabortion and anti-gun control. On the stump, he likes to describe how he and his wife, Johnnie Ruth, are struggling to take care of her sick mother.

    Shows knows that no Democrat is ever going to get a free ride in a district this conservative. On his five-day, 16-stop bus tour, he carefully avoided mentioning Clinton or other Democratic leaders. But he echoed the economic and moral arguments they have offered in Washington, trashing the GOP tax cut as an irresponsible giveaway to the rich, enthusiastically making the case for debt reduction.

    "I don't want to get too technical, but you need to know what's going on with that debt," Shows said. He argued that a lower debt would mean lower interest rates, saving Americans money on mortgage payments and car loans, keeping the economy humming by extending easier credit to small businesses and farmers. Then he suggested that Congress has a moral obligation to future generations to chip away at the debt now that times are good. "What kind of legacy are we leaving our children?" he asked. "We can't keep saddling them with bills. We gotta start paying them off now, or else we never will."

    Shows wants to use half the budget surplus for debt reduction, one-fourth for education, veterans' benefits and prescription drugs, and one-fourth for about $300 billion worth of "targeted" tax cuts. To most of his constituents -- most of them blue collar, many of them retired, very few of them wealthy -- that formula sounded just about right.

    "I'd like a tax cut, yeah, but a country's no different from a person: You gotta pay your bills before you do anything else," said Eugene Dennison, 54, a disabled welder from Meadville who once lost his home in a bank foreclosure. "So I don't trust those politicians who say everything's going to be okay with the debt."

    The economics of debt are obviously complex, but on the road with Shows, the politics of debt seemed remarkably simple: It's bad.

    Chandler Russ, 28, economic development director in Copiah County, wonders whether his generation will ever get to enjoy Social Security: "By the time we're done talking, the debt will go up a million dollars, and that's not fair to people my age." Tylertown Mayor Edward Hughes is so tired of working off debt that he doesn't use credit cards. "Maybe people in Washington think we're stupid out here," said Hughes, a funeral home owner who recently paid off his home mortgage. "But those of us who earn a living the old-fashioned way, by working, we understand the tremendous cost of indebtedness."

    The minute-hand metaphor worked for Shows. At a seniors lunch at an American Legion hall in Twin Lakes, Wis., Republican Paul Ryan gave a much more elaborate display of the nation's debt burden.

    First he called up a "responsible person," a senior citizen named Adolph, to represent the Social Security Trust Fund. Then he called up an "irresponsible person," a 29-year-old named Cass, to serve as the Treasury Department. Then he placed a "firewall" -- actually, a stiff-backed chair -- between the two men, and the role-play began.

    "What we had in 1968 was a firewall that prevented Cass from going over and taking money from Adolph," Ryan explained. "But then President [Lyndon B.] Johnson needed money to fund the war in Vietnam, so he and Congress took away that firewall."

    Ryan then moved around the audience, collecting "taxes" -- actually, green pieces of paper -- which he delivered to Adolph, before instructing Cass to steal and spend them. In other words, the Treasury Department had been raiding the Social Security Trust Fund. So Ryan produced bonds, "IOUs" that Cass distributed first to Adolph as a record of the tax money he stole, then to the members of the audience, who represented ordinary citizens as well as foreign nations. In other words, the government had raised money through borrowing.

    "And that," Ryan concluded with a gesture toward the IOUs littering the room, "is our national debt."

    It was a dismal scenario, and when Ryan suggested that the Social Security Trust Fund was "empty," one senior cried out, "Oh my God!" But Ryan said he had a plan: Congress should use the current surplus to buy back the IOUs. In other words, it should pay down the debt.

    Of course, that's pretty much what Shows has proposed, too. The difference is, Ryan thinks there is enough money in Washington's coffers to pay for the GOP's $792 billion tax cut and pay down the debt at the same time. That difference is likely to dominate congressional debate this fall, with Democrats arguing that to do both, Republicans will have to whack spending on education, law enforcement, the military and every other popular program.

    "It's not a question of reducing taxes or reducing debt. It's a question of providing tax relief or spending it in Washington on new government programs," Ryan said.

    Much of the audience seemed skeptical that the government could slash taxes and debt at one time. Robert Brock compared the debt to a giant credit card that ought to be paid off immediately. "I think most of us would spend everything on debt reduction," he suggested.

    But Ryan challenged him: "If you were given a choice between new spending and tax relief, what would you choose?"

    "I guess I'd choose tax relief," Brock replied.

    "I agree with you, sir," Ryan said, smiling with satisfaction.

    Ryan's district had tilted Democratic for years before conservative firebrand Mark Neumann (R) swept in with the Class of 1994. When Neumann gave up his seat for an unsuccessful Senate bid last year, Ryan defeated his Democratic rival by a surprisingly wide margin. But some believe Ryan may be vulnerable, and in an interview after his Twin Lakes session, he acknowledged that many of his constituents doubt the government can afford the GOP tax cut.

    "We have to be persistent," Ryan said as he drove his sports utility vehicle to his next talk. "They're repeating what they're hearing, and all they're hearing is the president on the evening news and his demagoguery."

    At the Burlington Senior Center, for example, Vera Boone, 67, complained that "most of the tax cuts go to the wealthy."

    But some of Ryan's constituents did like the idea of getting their tax dollars back, especially now that Washington seems to have some money to spare.

    "I struggled real hard all my life to raise five children, and now I finally have a little money to invest because I hold two jobs," complained 61-year old Marlene Scherrer. "I don't like paying capital gains taxes, and I definitely don't consider myself wealthy."

    Don Sherwood (R) squeaked into office in the closest House race of 1998, defeating Patrick Casey (D) by 515 votes. Casey wants a rematch, and he is already bashing Sherwood over the "ridiculous" Republican tax cut. Even Sherwood acknowledges that the reception in his eastern Pennsylvania district -- which includes Democratic Scranton as well as more Republican rural and suburban areas -- has been "mixed," but he pushed the plan hard in a speech in the GOP town of Towanda.

    "We're going to use the Social Security money for Social Security, we're going to pay down the national debt, and then, believe it or not ladies and gentlemen, if we can get this bill passed, we're going to return some of that extra money to you," said Sherwood, a millionaire Chevrolet dealer who served on his local school board for two decades.

    The problem is, even in this era of budget surpluses, many of his constituents seem wary of politicians who promise to do it all. "I don't think we necessarily need a tax cut," said Pam Peduta, 34, who said she is more concerned about health care.

    Ideally, Sherwood said, Clinton and the Republican Congress would work out a grand budget deal, something that would preserve Social Security and Medicare, pay down some of the national debt, and finance a tax cut that splits the difference between the parties. The battle lines may be drawn now, he said, but there's plenty of room for compromise.

    "Clinton's at a $300 billion tax cut. We've passed a $792 billion tax cut," Sherwood said. "We're going to end up somewhere in the middle."

    Grunwald reported from Mississippi, Eilperin from Wisconsin and Woodward from Pennsylvania.

    © 1999 The Washington Post Company

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