CONCORD, N.H. -- Two years ago, Republicans here were riding high: Presidential candidate George Bush took the anti-tax pledge they demand of all candidates in the New Hampshire primary and then made it a centerpiece of his victorious campaign for the White House.
But now that President Bush has abandoned his promise to resist tax increases, most of the state's GOP leaders are seething at what they see as an act of betrayal, expediency and disregard for the fortunes of Republicans who were basing their campaigns this year on the party's record of opposition to tax increases.
It is a complaint heard around the country from Republican candidates, who saw the tax issue as a potential margin of victory in close races -- until it was vaporized two weeks ago when Bush announced that "tax revenue increases" would be a necessary part of a deficit-reduction agreement with Congress.
In Illinois, Rep. Lynn Martin (R), who is challenging Sen. Paul Simon (D), said it is "not the kind of help I wanted." Rep. Claudine Schneider (R), running against Sen. Claiborne Pell (D) in Rhode Island, called it a "terrible" decision and said she will now have to work to convince voters that she disagrees. In Michigan, Rep. Bill Schuette (R), who is challenging Sen. Carl M. Levin (D), looked to the bright side, saying it might help by showing people "I'm nobody's boy."
But nowhere does the president's retreat from his "no new taxes" slogan of 1988 have more poignance and resonance than here in New Hampshire, where the issue was born and where some Republicans believe it could return to haunt Bush when he seeks a smooth sendoff for his campaign for a second term in 1992.
Not that New Hampshire races this fall are expected to be particularly close. Republicans are strongly favored to continue in control of the state legislature as well as the state's entire congressional delegation, including the Senate seat being vacated by Sen. Gordon J. Humphrey (R) after two terms.
Any jitters arise largely out of concern over New Hampshire's economy. Bouyant through most of the 1980s as it rode the crest of a high-tech, defense and commercial construction boom, the state's economy has gone flat in the past couple of years, unnerving those in power and causing some observers to hedge their bets on the outcome of this fall's elections.
The tax issue has added a note of volatility to a campaign that is already shaken by a tripling of unemployment to nearly 6 percent in the last year or so.
Perhaps more important, according to many Republicans, it has also raised questions about credibility and trust for all politicians and blurred one of the few clear distinctions between Republicans and Democrats at a time when military strength is receding as a political plus for the GOP in the wake of improved U.S.-Soviet relations.
"People feel a commitment has been broken," said Rep. Robert C. Smith (R), the front-runner to capture Humphrey's Senate seat. Even though he has been so consistently anti-tax that voters are unlikely to fear a flip-flop from him, Smith is concerned about the public's "cynicism about politicians breaking promises" and how this might affect other candidates, including himself.
Like many other Republicans, Smith believes Bush has sacrificed taxes as a defining issue for Republicans among voters who already have a hard time finding relevant differences between the parties. "It was the black and white of Republican-Democratic politics, and we've now made it gray," he said.
Smith, a conservative now in his third term in the House, is favored over his closest competitor, businessman Thomas Christo, to win a four-way Republican senatorial primary Sept. 11. He is also regarded as a strong favorite to defeat whoever emerges victorious from the three-way Democratic primary on the same day: former senator John Durkin, who served one term in the late 1970s; Nashua Mayor James Donchess; or John Rauh, a wealthy young Sunapee businessman. The Democratic primary is regarded as close, with Durkin narrowly ahead.
But Smith is taking no chances on the tax issue.
While the genial, mild-mannered lawmaker has avoided some of the harsh rhetoric of his Republican colleagues, he lost little time in issuing a statement disagreeing with Bush, including a pledge that he will continue to oppose tax increases of any kind, regardless of what his president may propose.
Humphrey, who is seeking a seat in the New Hampshire state Senate in what is widely viewed as a step toward the governorship, has dispensed with the niceties, calling Bush's tax turn-around a "major disaster on a national scale." "A dumb move all the way around," added Rep. Chuck Douglas (R-N.H.).
Douglas said he will not be surprised if Bush runs into opposition in the 1992 New Hampshire presidential primary unless he reverses course again and blocks any tax increase.
Democrats are poised to exploit Bush's reversal on taxes in a variety of ways, although it is virtually impossible to get to the right of New Hampshire Republicans in opposing tax increases.
Durkin, for instance, has said that Bush owes New Hampshire and the country an apology for breaking his promise on taxes. As for his own position, Durkin said that now is not the time to consider tax increases and that defense savings should be used to address new spending needs.
"Sure there will be a political spinoff in the Senate race," said New Hampshire Democratic Party Chairman Ned Helms. "It undercuts the Republican Party. No longer is there magic in just running around saying 'no new taxes.' "
According to news media interviews and the assessment of local politicians, New Hampshire voters appear to be far less shocked and outraged by Bush's reversal than Republican politicians. For one thing, voters say, they don't put much stock in anything that politicians promise before election day.
While New Hampshire voters have not abandoned their almost legendary hostility to taxes (the state has no sales or income taxes), even some party officials agree that most people here are willing to consider some tax increases -- other than an increase in income tax rates -- in order to reduce deficits.
Many people are also sympathetic to Bush's apparent strategy of wooing Democrats with concessions on taxes in order to get them to agree to spending cuts, officials say.
Donna Sytek (R), chairman of the state's House Ways and Means Committee, vehemently opposes Bush's turnabout but told a reporter during a Republican breakfast in Gorham, N.H., last Saturday: "People are willing to swallow hard and take a tax increase if that's what it takes to get Democrats to agree to spending cuts."
"You know, death and taxes, people know they've inevitable," shrugged Coos County Treasurer Paul Fortier (R), who also attended the breakfast. "Because of concern over the (federal) deficit, you don't find it's as much of an issue on the federal level as it is on the state level," added Rhona Charbonneau, a state senator and chairman of the New Hampshire Republican Party.
Both the economy and the tax issue could spell more trouble for Republican Gov. Judd Gregg, who is also seeking reelection this fall, than it does for candidates for federal office, some believe.
And if a budget agreement in Washington leads to higher federal taxes on cigarettes, beer and other items that New Hampshire relies on for revenue, it could make it harder for the state to balance its own budget, Sytek noted.
Voter tolerance of Bush's reversal on taxes is underscored by the fact that the only major Republican office holder who supports the president's position -- Sen. Warren B. Rudman (R-N.H.) -- is also the state's most popular politician, according to a recent Boston Globe-WBZ-TV poll.
If anything is going to threaten New Hampshire Republicans at the polls this fall, it is the economy, and the best way to rekindle economic growth is to bring down interest rates by cutting the deficit, Rudman contends.
So long as he does not agree to an increase in income taxes, New Hampshire voters will go along with any Bush-blessed tax increases, especially if the result is a renewal of economic growth, Rudman said.
Then why are his colleagues so wedded to a no-new-taxes position? "Mainly," said Rudman, "it's easier to explain."