AMHERST, New Hampshire (Reuters) - If Charlie Bass is going to get back to Washington, he will have to convince voters the Republican Party is serious about getting the tattered U.S. balance sheet in order.
As Republicans look to regain control of Congress by winning over Americans worried about trillion-dollar budget deficits, Bass is eager to remind voters of his frugal ways during his 12 years in the House of Representatives before he was defeated in 2006.
“I have voted to reduce spending for every single program that exists in the federal government today and some that don’t,” Bass said in an interview.
Republicans are poised for big gains in the November 2 congressional election as voters give President Barack Obama low marks on his management of the economy as it recovers fitfully from the worst downturn since the 1930s.
Here in New Hampshire, the Republican Party’s renewed focus on fiscal matters could prove fruitful after a devastating decade that saw them lose a Senate seat, both House seats and control of the state legislature. Republicans aim to win back that lost ground this year and win the governorship as well.
“This is a state where, historically, if Republicans campaign aggressively on fiscal issues and stay on the offensive, they tend to win,” said Dante Scala, a professor of political science at the University of New Hampshire.
With low taxes and a business-friendly climate, New Hampshire has for decades been one of the fastest-growing states in the northeast and its current unemployment rate of 5.7 percent is well below the national average of 9.6 percent.
Suspicion of government is commonplace.
“Even a burger flipper is creating something more than a government worker,” said small business owner Brian Handley as he polished off dinner at a Manchester restaurant.
Political handicappers say Bass holds a slight edge over his Democratic rival Ann McLane Kuster in the race for a seat in the House. Republicans are also favored in the other House race and the Senate race.
While Republicans are campaigning as the party of limited government, retiree Pete Stearns remembers differently.
Like many voters who abandoned the party over the past decade, Stearns hold Bass and other Republicans responsible for allowing the red ink to grow when they were in control of Congress before 2006.
“Less spending, smaller government — they’ve been saying this for 20 years,” said Stearns, who backs Kuster. “Charlie’s a proven big spender.”
At the Republican state convention on Saturday, candidates blasted Democrats as reckless spenders whose policies will lead to a lower standard of living.
“We can pick between record-setting deficits that will ruin America and make us poorer than many of the countries in the Third World or we can pick a different course,” Bass said.
Nearby, the problem doesn’t seem quite so urgent. The voters who shake hands with Kuster on Amherst’s shady green want to talk about healthcare and job creation.
What about the deficit?
“It’s a big number but you’ve got to look at the historical perspective,” said undecided voter Dave Yabroudy. “The sky was falling in 2008 and we pulled out of it.”
Over the past decade, budget surpluses turned to deficits as Republicans pursued tax cuts and wars in Iraq and Afghanistan. The financial crisis and subsequent recession, as well as the Obama administration’s $814 billion stimulus plan, pushed the United States further into the red.
The government is expected to spend $1.3 trillion more than it takes in during the fiscal year that ends on September 30, down slightly from the record $1.4 trillion deficit in fiscal 2009.
Measured against the economy, those two deficits are higher than any posted since World War Two.
Fiscal hawks warn that a Greece-style debt crisis is on the horizon but they are not necessarily happy that the deficit is now a hot topic in the battle for Congress.
“What I think we’re getting is people chanting unrealistic talking points at one another,” said Robert Bixby, executive director of the nonprofit Concord Coalition. “The danger is that people lock themselves into positions that make it impossible to solve the problem once you get elected.”
For the moment, financial markets are not calling for the government to rein in spending. The benchmark 10-year Treasury bond is yielding near historical lows of around 2.5 percent.
Investors are much more concerned about the sluggish state of the economy, said Amelia Bourdeau, an economist with UBS in Stamford, Connecticut.
Although the Federal Reserve may act to stimulate the economy, Congress is unlikely to act as Republicans have managed to block the most ambitious proposals by Obama and his fellow Democrats.
Support has also eroded among the public. A Reuters/Ipsos poll released last week found a majority of Americans believe the government should cut the deficit to balance the budget in hard economic times, while only 39 percent said it should run a deficit to stimulate the economy.
In the battle to represent the western half of New Hampshire, both Bass and Kuster have plans to get the budget under control.
Bass has proposed repealing the stimulus and bank bailout programs and rolling back much government spending to 2008 levels, which would save roughly $100 billion.
He said Congress should resurrect a committee tasked with cutting spending, along the lines of one that existed in the years following World War Two.
He is also calling for a tougher version of a commission to look at ways to limit the cost of Social Security, Medicare and other entitlement programs, which account for more than half of all federal spending.
A commission appointed by Obama to examine ways to cut the deficit already exists and is due to meet again on Wednesday.
Kuster says she would end the wars in Iraq and Afghanistan, allow income tax rates to rise for the wealthiest 3 percent of households and encourage growth through a temporary payroll tax and targeted tax breaks for businesses.
She also wants the government to expand access to broadband Internet and continue its home energy-saving program.
“I think it’s completely irresponsible to drive up deficits,” Kuster said in an interview. “I was raised here as a frugal Yankee.”
Both candidates’ plans would actually make the budget picture worse because they would extend Bush-era tax cuts for 97 percent of Americans without paying for them, said Maya MacGuineas, a fiscal policy expert who heads the Committee for a Responsible Federal Budget.
“Maybe it is too much to hope for but you would think that given the gravity of the economic challenges the country faces, candidates would be putting out more specific and detailed solutions,” she wrote in an email.
Back in Amherst, Yabroudy likes the idea of electing more Republicans to serve as a check on Obama. He said he was struck by an unusual television ad — a Republican who acknowledged that his party had strayed from its small-government roots.
“I can’t remember his name but I’d vote for him in a heartbeat,” Yabroudy said.
Editing by John O'Callaghan