GOP Is Losing Grip -- Deficit Hawks Defect As Social Issues Prevail; 'The Party Left Me'

From The Wall Street Journal:

The Republican Party, known since the late 19th century as the party of business, is losing its lock on that title.

New evidence suggests a potentially historic shift in the Republican Party's identity -- what strategists call its "brand." The votes of many disgruntled fiscal conservatives and other lapsed Republicans are now up for grabs, which could alter U.S. politics in the 2008 elections and beyond.

Some business leaders are drifting away from the party because of the war in Iraq, the growing federal debt and a conservative social agenda they don't share. In manufacturing sectors such as the auto industry, some Republicans want direct government help with soaring health-care costs, which Republicans in Washington have been reluctant to provide. And some business people want more government action on global warming, arguing that a bolder plan is not only inevitable, but could spur new industries.

Already, economic conservatives who favor balanced federal budgets have become a much smaller part of the party's base. That's partly because other groups, especially social conservatives, have grown more dominant. But it's also the result of defections by other fiscal conservatives angered by the growth of government spending during the six years that Republicans controlled both the White House and Congress.

The most prominent sign of dissatisfaction has come from former Federal Reserve Chairman Alan Greenspan, long a pillar of Republican Party economic thinking. He blasted the party's fiscal record in a new book. In an interview with The Wall Street Journal, he said: "The Republican Party, which ruled the House, the Senate and the presidency, I no longer recognize."

Some well-known business leaders have openly changed allegiances. Morgan Stanley Chairman and Chief Executive John Mack, formerly a big Bush backer, now supports Democratic front-runner Sen. Hillary Clinton of New York. John Canning Jr., chairman and chief executive of Madison Dearborn Partners, a large private-equity firm, now donates to Democrats after a lifetime as a Republican. Recently, he told one Democratic Party leader: "The Republican Party left me" -- a twist on a line Ronald Reagan and his followers used when they abandoned the Democratic Party decades ago to protest its '60s and '70s-era liberalism.

Concern for their fiscal reputation is reflected in the fights that President Bush and congressional Republicans now are picking with the new Democratic majority over annual appropriations and an expansion of a children's health program, in hopes of placating party conservatives.

For all the disillusionment among Republicans, the party retains strong support in many parts of the business community, in part because of fears about the taxing and regulating tendencies of Democrats.

For his part, Mr. Greenspan says he doubts he will vote for a Democrat for president next year, because the party is moving "in the wrong direction," becoming more populist and protectionist.

Overall, Democratic presidential candidates have raised more than $200 million this year, about 70% more than their Republican rivals.

The once-dominant "deficit hawks," who put balanced budgets ahead of tax cuts (think former Sen. Robert Dole, or Mr. Bush's father), are all but extinct. A quarter-century of infighting between those Republicans and others who seek lower taxes regardless of deficits has been decisively settled in the current Bush administration in favor of the tax cutters.

The result has been big tax cuts, and in the dozen years when the Congress was under Republican control, big spending increases as well.

One glue holding the party together is that social conservatives often share the goals of economic conservatives. Social conservatives supported the Bush tax cuts and wanted to make them permanent. But their priority, and what keeps them Republicans, is opposition to abortion, gay rights and the like.

Some intraparty tension is rooted in cultural differences. Social conservatives tend to be relatively lower-income, less educated, concentrated in the South and West, and newer to the party than many old-line Republicans of an economic or business bent. Each blames the other for the party's current state -- often employing pejoratives such as "Bible-thumpers" or "country-club Republicans."

In last fall's midterm elections, rebellious Republicans and Republican-leaning independents contributed to the Democrats' takeover of Congress and a raft of state and local offices. The Democratic Party had lured many newcomers through shifts of its own since the Reagan era. Particularly under President Clinton, the party became more centrist and fiscally conservative, espousing balanced budgets, targeted tax cuts and free trade. Party liberals and unionists never fully accepted those changes.

California Gov. Arnold Schwarzenegger has lost some Republican Party support because of his socially liberal stands and his proposals on global warming and universal health care. But those stands have made him more popular generally in the state, while his party is less so.

Nationally, support for some Republican causes espoused by social conservatives and hawks has declined in the general population as Americans have grown more concerned about economic matters. Those were the conclusions last spring of the nonpartisan Pew Research Center, based on its latest surveys on Americans' political attitudes.

[T]he number of Americans who share some classic Democratic concerns has risen. Three-quarters of the population is worried about growing income inequality, Pew found, while two-thirds favor government-funded health care for all. Support for a government safety net for the poor is at its highest level since 1987, Pew said.

"More striking," Pew concluded, was the change in party identification since 2002. Five years ago, the population was evenly divided -- 43% for each party. This year, Democrats had a 50% to 35% advantage.