Congressman Kemp's playbook: conservatives should modernize the supply-side message.(SPECIAL POST-ELECTION ISSUE)(Jack Kemp)

WHEN Jimmy Carter was elected president in 1976--with sizable Democratic majorities in both houses of Congress--plenty of pundits speculated about Republicans as an endangered species. A writer for the New York Times contemplated the GOP's "extinction." Robert Novak commented on "the long descent of the Republican Party into irrelevance, defeat, and perhaps eventual disappearance."

Four years later, of course, Americans tossed out Carter and elected Ronald Reagan.

The sources of Reagan's victory were many, from Carter's poor performance to Reagan's impressive political skills. Yet the Gipper also owed a great deal to conservatives in the House of Representatives, especially Jack Kemp. Instead of behaving as powerless members of a vanishing minority party, Kemp and his allies helped create the conditions for Reagan's success. They pushed an agenda of supply-side tax cuts that redefined their party's economic principles and shifted American politics rightward. Much of their achievement was rooted in the particular circumstances of the late 1970s, but their accomplishment also suggests that today's GOP--battered by the blows of November 4--is far from helpless if it will only show the determination to turn its current dilemma into a new opportunity.

Jack French Kemp Jr. was a Californian who quarterbacked the Buffalo Bills to two American Football League championships in the 1960s. He became a local hero, winning election to Congress in 1970 from a working-class district along the shores of Lake Erie. But it wasn't a safe seat for a Republican. Unemployment was high. Anxieties were even higher. A natural-born optimist, Kemp became convinced that his political future depended on breaking away from the traditional Republican vision of budget austerity.

The example of John F. Kennedy excited him. For one thing, Kemp shared a set of initials with the former president. For another, JFK had pushed a tax credit for capital investment through Congress--and capital investment was exactly what Kemp thought his beleaguered district needed in order to keep its factories open for business. Later, Kennedy proposed sweeping income-tax reductions as well. So Kemp resolved to make tax cuts his trademark issue. "He really seized on it," says Randal Teague, Kemp's former chief of staff. "Every week, we tried to figure out a new way to say the same thing, to get some fresh legs under our message on taxes."

The challenges were huge. Kemp was a backbencher with the wrong committee assignments. His gridiron exploits were an asset with the public, but they may have hurt him among congressional insiders: Who was this dumb jock with the raspy voice? Moreover, many Republicans were deeply skeptical of tax reduction. They saw themselves as the party of fiscal discipline. Tax cuts meant lost revenue, and lost revenue meant budget deficits; anything else was "voodoo economics," as George H. W. Bush once put it. Even Barry Goldwater --lionized by many libertarians today--voted against JFK's tax cuts because he thought they were irresponsible. "The most important thing Kemp did wasn't with respect to the Democrats," says Bruce Bartlett, a former staffer. "It was with respect to the Republicans, and convincing them to change their views on balancing the budget."

Kemp became a supply-side evangelist who believed that tax cuts would not only spur economic growth, but also bring in more revenue for the government. "He had nothing to lose, and when you have nothing to lose you can go pretty far," says David Smick, a former top aide. Even so, Kemp wasn't reckless. He was savvy, with a keen eye for hiring top talent. Soon his congressional office was operating as a miniature think tank on the Hill, and Kemp himself was connecting with supply-side intellectuals such as Art Laffer, Robert Mundell, and Jude Wanniski. When they converted Robert Bartley, editorial-page editor of the Wall Street Journal, to their side, they gained a powerful bully pulpit.