Pre-Election Spin Jude Wanniski November 2, 1998

WALL STREET: There’s nothing coming from the polling data around the country to suggest anything but minor Republican gains across the board -- in the Senate, House and governorships. Nothing, in other words, to add risks to equity portfolios. No Republican gains would mean little prospect for promised GOP changes in the tax code next year. Major Republican gains would suggest a greater public appetite for an impeachment inquiry than is showing up in the polls -- and that might be considered disruptive to the kind of bipartisan comity generally required to make changes in the status quo. In other words, we don’t know if the 106th Congress will be a standoff Congress like the 104th, or one that might produce positive tax legislation in its first year, 1999, as the 105th did in 1997. In the first days after the election, we will hear from the several spinners in both parties regarding how they wish the outcome to be interpreted.

WISCONSIN SENATE: The ideological spinners left and right are already at work identifying the importance of the Senate race between incumbent Democrat Russell Feingold and challenger Mark Neumann, a GOP member of Congress. If Feingold wins, liberals will insist it is a victory for campaign finance reform. If Neumann wins, cultural conservatives will say it proves the party should stick with social issues as high priorities, like partial birth abortion. Neumann may win because he is posing as a tax cutter in the closing days of the campaign and Feingold is not calling him on this deception. Neumann, in fact, is an ardent leader of the Hoover austerity wing of the GOP, who favors paying down the national debt before taxes are cut. If Neumann wins, the balance-the-budget crowd would hail the victory as proof that this is the way to go. Neumann reminds me of the Philadelphia beauty contest, where upon seeing the first contestant, the judges declare the second the winner, sight unseen.

NEW YORK SENATE: Here, the importance of the race between incumbent Alphonse D’Amato and Democratic Rep. Charles Schumer comes down to the chairmanship of Senate Banking. If D’Amato loses, Sen. Phil Gramm of Texas becomes chairman. Both D’Amato and Gramm are pit bulls, streetfighters, but Gramm has a Ph.D. in economics and worships Milton Friedman and floating exchange rates. D’Amato has no such ideological hangups. If we are going to get a global monetary fix next year in advance of Y2K, it will be helpful to have D’Amato rather than Gramm in the driver’s seat. Gramm is better on the IMF than D’Amato, but the IMF now has its money and won’t be back at the well for another few years. If he pulls it out after falling far behind Schumer, D’Amato will be able to thank Senate Majority Leader Trent Lott for recommending two weeks ago that he ask Jack Kemp to campaign for him in western New York, where Kemp remains enormously popular from his days as a Buffalo Bill footballer and as a congressman. D’Amato finally got Kemp to come in last Friday, and for the first time D’Amato began talking about tax cutting, as Kemp correctly labeled Schumer a liberal tax-and-spender. Pollster John Zogby, who says the race now is dead even, credits D’Amato’s upstate swing with closing the gap -- although he does not mention Kemp. Watch the Buffalo returns, especially if D’Amato wins by a whisker.

CALIFORNIA: GOP gubernatorial candidate Dan Lungren and Senate candidate Matt Fong both look like sure losers. At the last minute, they’re pleading with Kemp to fly to California tonight from Florida, to help give a boost to the black and Hispanic vote. It’s probably too late for Lungren but may help Fong.