More of the same? Or something new?

It's the eternal election question--and one that bodes ill for U.S. congressional Republicans in 2006. Measured just about every way you can measure, U.S. voters are distressed and hankering for change.

Resident Fellow David Frum

President Bush's approval numbers continue to slump below 40%. No president in the history of polling has ever polled this badly, this long.

Congress fares even worse. Only 29% approve of Congress' performance.

You'd think, to look at these numbers and many more like them, that the U.S. must be struggling with some terrible economic malaise.

But in fact, the U.S. economy continues to grow strongly, faster than 3% a year. Want a job? Take your pick--unemployment bumps along at 4%. More Americans own their own homes than ever before in history. Retail sales remain brisk. New unemployment insurance claims dropped last month.

The typical American family enjoys substantial prosperity. The median family--the family smack in the middle of the income distribution--earns US $66,000 per year. The median married family earns US $70,000. The median two-income family earns US $80,000.

So what's the complaint?

Four problems head the list.

First, although family incomes are high, they are not rising very rapidly. That median family does not make more today than it did in 2000. The most important culprit is health costs.

Employers are paying more for labour; indeed average hourly compensation costs have soared more than 25% since 2000. But the cost of employer-provided health care has risen even faster. So almost every extra penny paid out by employers has disappeared down the health care maw.

And it gets worse. Employers expect employees to contribute directly to the cost of their health insurance, usually about one-fifth of the total. But between 2000 and 2005, the average cost of a family policy jumped almost $5,000, from $6000 to nearly $11,000. The typical employee contribution jumped too, by about $1000. So not only did our median family lose most of its expected raise to health care inflation, but it also had to dig into its pockets to pay $1,000 more in direct costs.

Next, energy prices. Energy prices soared between 2004 and 2005. Not just gasoline, but natural gas, electricity, the whole utility bill. Today, almost one dollar in 10 in the typical family's budget goes to fuel its cars and heat and cool its home.

Third is a broader problem of insecurity. Fears of terrorism weigh heavily on Americans. An Ipsos-AP poll conducted last week found that 43% think another terrorist attack likely; almost half say that the 9/11 attacks continue to affect the way they live. The evening news tells them of carnage and turmoil in Iraq and threats from Iran. The future seems to offer only more wars, more violence and someday more taxes to pay for it all.

Fourth and last: As is their way during Republican administrations, the mass media have assiduously notified Americans that some people have made more money than others in recent years. No question, the gap between the top 5% or 1% and everybody else has widened since 2000. It is not, however, widening any faster than it did in the 1990s. But it gets publicity!

And this publicity makes itself felt in public opinion. The University of Michigan's famous survey of consumer confidence finds that the gap between the confidence of the most affluent and and that of the least affluent consumers now stretches wider than at any time in the past three decades. One-quarter of Americans surveyed now say they regard increasing inequality as a major social problem.

There is good news for Republicans in 2006. Gasoline prices have dropped since Labour Day, and they seem poised to continue their decline. Republican voters seem more disciplined and determined than Democrats. (One poll finds that more Republicans than Democrats know the name of the Democratic leader in the House of Representatives, Nancy Pelosi.) The most at-risk Republican senator, Rick Santorum of Pennsylvania, has run an especially brilliant campaign.

Nor have Democrats managed, as some wished to do, to create a national message like the Republican Contract with America of 1994. Democrats oppose high gas prices and expensive health insurance. They condemn terrorists almost as fiercely as they despise the top 1%. But as for what they would actually do in power, they say little or nothing, except that they would launch lots and lots of investigations of alleged Republican wrongdoing.

Despite this vacant Democratic agenda, the landscape looks grim for Republicans, especially in the House. Already, Democrats are looking forward eagerly to the perquisites of power. If only they showed signs of equally readiness to shoulder its responsibilities.

David Frum is a resident fellow at AEI.