The Budget Surrender.

It might surprise progressives, given how far right the political debate has moved in recent years, to hear that old-fashioned tax-and-spend liberalism is as popular as ever in Washington. The problem isn't that Democratic politicians, Congressional staffers, and liberal think-tankers actually believe the era of big government is over, or that what the economy needs is a tax cut. The problem is that they won't say what they really think on the record.

I was at an off-the-record policy lunch at the Brookings Institution to discuss the Bush budget recently and was sitting next to NPR's Daniel Schorr when he became exasperated with the cautious tone of the conversation. Why, he asked, do the Democrats seem so willing to go along with the Reagan-era, "starve the beast" theory that says we must cut taxes so we can shrink government? These days, there seems to be a bipartisan consensus: Tax cuts are good, and government spending is bad. No one seems willing to point out, Schorr noted, that "government spending" includes many of the things that make life livable for the poor and working class--good schools, health care, pensions.

There was a round of agreement on this point from the politicos and policy experts present. Everyone laments the demise of the old Democratic message that we can do better, that government spending contributes to a society where children get health care, the elderly don't live in poverty, and all of us enjoy better schools, less crime, a cleaner environment--the conditions a free market doesn't manufacture. These are the services government Should provide.

The logic is unassailable, the assembled Democrats agreed, that taking care of society's neediest should come before tax cuts for the very rich.

So why haven't they beaten the drum loudly in the Bush budget debate? Why are they willing to settle for a tax cut of $1.3 trillion instead of $1.6 trillion?

The answer is that they lack the courage of their convictions. There is a strange double-consciousness at work within the party. Maybe it comes from eight years of endlessly deferred gratification during the Clinton Presidency. If only we talk about paying down the debt, shoring up Social Security, and ending welfare now, we can stave off big tax cuts and have money left in the government coffers to take care of human needs later, the argument went. Now Clinton is gone, and all that austerity talk is on the verge of becoming a permanent reality. The huge surpluses of recent years are about to melt away in the form of a tax cut for the rich. And the argument that we must cut spending will be "unassailable."

Instead of arguing for universal health care, high-quality, government-subsidized day care, more spending on affordable housing, and other crying needs, one liberal think-tanker suggested that, since public spending primarily benefits lower and middle class people, Democrats should consider aiming tax cuts at those same groups.

Despite our unprecedented prosperity and the opportunity to do something about pressing social needs, tax cuts, not spending, are the order of the day.

To be fair, Bush has managed the agenda perfectly, from a public-relations standpoint, by scheduling votes on his tax-cut package before the cuts in specific programs that will be required to pay for it are on the table. Democrats had to respond to the political issue of tax cuts in a vacuum, as if all that cutting were free. And, at least on the issue of education, the Democrats came out for a $50 billion increase in elementary and secondary education next year, versus Bush's anemic $4.5 billion. Still, a strong Democratic leadership could be making more of the Bush budget cuts. The larger philosophical issue of what government is for, and whether we owe any minimal standard of care to our most vulnerable citizens, goes unargued.

The irony is, government spending as a percentage of the Gross Domestic Product (GDP) is actually at its lowest point in thirty-five years, according to the Congressional Budget Office. Total federal spending was 18.2 percent of the GDP in 2000, down from 22.3 percent in 1991, continuing a steady, decades-long decline.

The Bush budget disguises the profound effects of further cuts in domestic programs. The Center on Budget and Policy Priorities points out that, contrary to mainstream news accounts, what the Bush Administration calls a 4 percent increase in spending across the board actually translates to a $50 billion cut in domestic discretionary spending over the next ten years. Part of the reason is that the Bush budget fails to take inflation or population growth into account, and the Administration low-balls current budget numbers to give the impression of increases in programs that will actually suffer cuts. If further cuts are to be made, they will have to come out of non-discretionary budgets--Social Security, Medicare, or defense spending.

Martha McSteen, who was Reagan's acting commissioner of the Social Security Administration and is now president of the Committee to Preserve Social Security and Medicare, points out that Medicare is in the best financial shape it has been in since 1965. But the Bush budget plan may change that.

In order to finance about one-third of his tax cut, Bush's budget proposal frees up $526 billion in general revenue funds by transferring the money out of the Medicare trust fund and into the nontrust-fund part of the Medicare budget. This little sleight of hand moves up the date when the Medicare trust fund is projected to become insolvent from 2025 to 2010, which feeds the Administration's argument for privatization to "save" Medicare.

"Bush's budget proposal describes Medicare as being in dire financial condition, but the wound is largely self-inflicted," says McSteen.

Likewise, on Social Security, while Bush appoints a commission to study privatization schemes, he uses the off-the-book Social Security trust fund in his estimates of the surplus he intends to give back to taxpayers. Every Democrat on Capitol Hill should be pointing out that without Social Security about half of all American seniors would be living in poverty. How many of them can count on a lucky break in the stock market to bail them out when the federal entitlement is gone?

Make no mistake. We are being set up for the repeal of the last of the hard-earned New Deal antipoverty and health care programs for elderly and poor Americans. Bush's tax cut rivals Reagan's 1981 cut, which generated the massive budget deficits of the 1980s. (The Center on Budget and Policy Priorities estimates that Bush's cut, at 2.0 to 2.3 percent of GDP, is about the same size as Reagan's whopper.)

Of course, Reagan turned the word "liberal" into a pejorative and sent the Democrats on a two-decade flight from the charge that they are all out to "tax and spend" America into oblivion. If the Democrats are ever going to change the terms of the debate and win back public support, they'll need to stop running and stand their ground.

But they need to go farther than that and start playing offense. It's going to take more than a defense of Social Security and off-the-record sighing about child poverty and human needs to rekindle a genuine opposition to the Republican assault.

For now, inside the Beltway, there's nary a spark.

Ruth Conniff is Political Editor of The Progressive.