Is It ’94 or ‘84? Candidates Relying on Retro Rhetoric : Politics: Republicans revive Reaganomics with a new ‘contract.’ Democrats deride trickle-down, part two. Off-year campaign sounds awfully familiar.

WASHINGTON — Voters trying to decipher the economic themes of Republican and Democratic candidates in this year’s elections must feel a little bit like Yogi Berra did when he said it was deja vu all over again.

Republicans, hoping to recapture the glory days of Reaganism, are reverting to the hoary themes of 1980, issuing a 10-point “contract with America” that commits them to huge tax cuts and a constitutional amendment that would require the President and Congress to balance the federal budget.

Democrats, meanwhile, are reaching back to 1982, the year that saw some of their most successful attacks on President Ronald Reagan’s programs. Largely afraid to identify with President Clinton’s economic record, Democratic candidates are instead countering the GOP “contract” by raising the specter of Reagan’s controversial trickle-down economic theory and warning that a balanced-budget amendment would produce sharp cuts in Medicare and Social Security.

This back-to-the-future campaign underscores the dearth of new ideas about U.S. economic policy that now plagues both parties and threatens to increase voter alienation and frustration with Washington.

Further, it suggests that, even if Democrats are able to retain control of Congress, Clinton may find little support in his own party for his economic agenda, especially for what White House aides describe as his long-term strategy to restore American competitiveness--new spending aimed at expanding federal job training and education programs, welfare reform and other so-called investment projects.

To deal with the new Congress, Clinton likely will be forced to fashion an economic agenda for 1995 that responds more directly to short-term Republican challenges. Even as the White House and Democratic candidates have derided Republicans for issuing what they charge are outlandish promises of expensive tax cuts as part of their “contract,” senior Administration officials conceded that they will begin a serious study of a middle-class tax cut proposal of their own soon after next month’s elections.

Yet the dominant economic theme of the campaign right now seems to be driven by a sudden and rather puzzling desire by both sides to rehash the stale arguments of the 1980s.

This tendency comes at a time when the economic problems of the nation are more complex than ever and seem to demand far greater creativity and innovation from Washington than is being offered by either major party, many experts believe.

Clinton, for example, has sought to begin a debate during this fall’s campaign over what many leading economists and political analysts think is the most puzzling and ominous economic trend facing the nation: the steady decline in income at a time when the overall economy is in the midst of a recovery.

Administration policy-makers are convinced that a continuing decline in wages for families in 1993, coupled with a heightened sense of job insecurity in the face of widespread corporate layoffs, explains why most Americans have so little confidence in the ongoing recovery--and in Clinton’s economic policies.

“We’ve seen a continuation of a 15-year trend in declining American incomes and standards of living. We’ve put in place policies to begin to address that, but you can’t reverse that overnight,” acknowledged Laura D’Andrea Tyson, who heads the White House Council of Economic Advisers. And President Clinton argued this week that, if he does propose a middle-class tax cut, it will be to offset “the problem of stagnant wages.”

Yet few Democrats or Republicans are showing any interest in engaging in complex debates this fall on such issues. Instead, congressional candidates seem satisfied to replay old arguments over so-called Reaganomics and thus are reverting to slightly altered versions of the same sound bites they were using a decade ago.

“The Republican contract is deja voodoo economics,” quipped Labor Secretary Robert B. Reich. “People are beginning to see that this is just Republican cotton candy,” added Rep. Vic Fazio (D-West Sacramento), chairman of the Democratic Congressional Campaign Committee.

“Hey, if this is a referendum on Ronald Reagan versus Bill Clinton, we’ll take it,” countered Tim LeFever, Fazio’s Republican challenger, one of more than 300 Republican House candidates who have signed on to the party’s contract.

From a purely political standpoint, the Republicans may have miscalculated by announcing a party-wide contract that ties them so directly to an updated version of Reagan’s economic ideas. In an off-year election, the party out of power traditionally tries to keep the focus on the record of the governing party without offering substantive policy prescriptions of its own. But this year, the Republicans have given Democrats the chance to run against 1980s Republican policy--and avoid having to defend the Clinton record.

“The contract reminds everyone of why they voted the way they did in 1982,” an off-year election in which Republicans suffered huge losses, observed David Wilhelm, chairman of the Democratic National Committee.

In addition to a balanced budget amendment, which would require steep and painful cuts in a wide range of federal programs, the Republican accord, signed by more than 300 House candidates, also calls for enormously expensive tax breaks, including a 50% cut in the capital gains tax; a $500-per-child tax credit for families with annual incomes up to $200,000; tax relief for Social Security beneficiaries; elimination of the so-called marriage penalty, which means that married couples usually pay more than two single taxpayers; and a dramatic expansion of individual retirement accounts, which postpone payment of some taxes until retirement.

While less-controversial elements of the contract deal with social issues, such as crime and welfare reform, and national security issues, such as the role of U.S. forces in multinational operations, its economic provisions and the dubious budgetary math behind them have offered the most attractive targets for Democrats. Senate Republicans, wary of the political implications of the House GOP pact, issued a series of similar proposals but not in contract form.

In fact, the potential for a massive budgetary crisis from the Republican plan prompted one senior congressional budget official to call it the Republican “contract on America.”

And Democrats across the country are savaging Republicans by warning that the balanced budget amendment would require cuts in Social Security and Medicare benefits--which also provided the dominant anti-Reagan theme in 1982. House Minority Whip Newt Gingrich of Georgia charged that Clinton and the Democrats are openly lying about the contract, since Republicans have promised not to touch Social Security. Yet Republicans still find themselves on the defensive.

“I think the Republicans threw us a life jacket when they announced their ‘contract with America,’ because clearly that package just doesn’t add up,” observed Rep. Timothy J. Penny (D-Minn.), a leading fiscal conservative who is retiring this year.

Before the contract was unveiled in late September, Democrats were at a loss about how to deal with economic issues. “They (Democratic candidates) now have something to get people’s attention on economic policy,” argued Robert E. Rubin, chairman of the National Economic Council at the White House.

Still, few Democrats have been willing to follow the risky strategy of Rep. Bob Carr, (D-Mich.) and openly defend their past support for Clinton’s economic policies. In his campaign for Michigan’s open Senate seat, Carr is airing television commercials defending his vote for the Clinton economic plan of 1993.

“It seems to me that the budget reconciliation act (the 1993 Clinton plan) was a big piece of legislation with many elements, including deficit reduction and new investments, and we should not let Republicans get away with the big lie that this was just a tax bill,” Carr said.

Republican leaders, meanwhile, remain undeterred by the new willingness of Democrats to go on the offensive on economic policy and are convinced that their contract has helped frame the debate and has forced longtime Democratic incumbents to respond to Republican challengers. In fact, the contract is being most widely used by Republican challengers, while Republican incumbents are largely downplaying its importance in their races, according to Ed Gillispie, a spokesman for the House Republican Conference.

“You’ve got a situation where everything in our contract scores very positively with normal voters,” said Gingrich in defense of the Republican strategy. “And remember, there is no Clinton contract. They (the Democrats) are only out there running a cynical smear campaign on our contract. We are trying to take the high road and show what we will do. And we’re saying if we don’t do it, throw us out. But I don’t understand their strategy at all.”