Feb. 3 (Bloomberg) -- Richard Tarrant's campaign Web site flashes a running tally of the national debt as a protest, he says, of the ``borrow-and-spend Republicans'' in Washington.

Tarrant is a Republican. He's also a candidate for Vermont's open U.S. Senate seat and among a group of party insurgents who want Republicans to reconcile their stated philosophy of fiscal restraint with the spending binge they've led over the past five years. The debt ticker is at $8.199 trillion and counting.

``Fiscal responsibility is part of our Republican culture,'' said Tarrant, a 63-year-old millionaire who co-founded Burlington, Vermont-based software company IDX Systems Corp. ``Any time we go away from that, I want to distance myself.''

That Tarrant, who is vying to replace independent Senator James Jeffords, and lawmakers such as Representative Mike Pence and Senator John McCain are running hard on an issue that once was a cornerstone of the party platform illustrates the dilemma that the Republicans face before the November election to decide control of Congress.

``We are in a pitched battle for survival in this mid-term election,'' said Rich Bond, a Republican consultant and former Republican National Committee chairman. ``We have virtually lost the saliency of the cutting-government-spending issue as one of the core issues for the Republican Party. We need to make this issue go back and work for us again.''

That may be a tall order.

Democratic Edge

Americans give Democrats a 17 percentage-point lead over President George W. Bush on who can better manage the nation's deficit, according to a Bloomberg/Los Angeles Times poll last week. The attitude is a reversal from when Ronald Reagan successfully campaigned against ``tax-and-spend'' Democrats in 1980.

Bush succeeded Democrat Bill Clinton in 2001 and inherited a record budget surplus of $236 billion. A little more than a week after Bush took office, the Congressional Budget Office forecast the surplus would hit $5.6 trillion over 10 years, enough to let the government pay down all redeemable publicly held debt by 2006.

Within a year the surplus evaporated. In 2002 the budget fell into a deficit of $158 billion, which grew to a record of $413 billion in the 2004 fiscal year. In 2005, the deficit fell to $318 billion, though the White House forecasts it will widen $400 billion this year.

Causes

When he talks about the causes of the fiscal reversals, Bush cites the economic shock of the Sept. 11 terrorist attacks and spending on the war against terrorism that followed, as well as a recession from March to November 2001 and a stock market tumble after a series of corporate accounting scandals.

Bush doesn't mention the effects of the $1.85 trillion in tax cuts that he pushed through Congress in his first term. Income tax collections fell from a record $1.004 trillion in 2000 to $794 billion in 2003, and corporate taxes fell more sharply: from $207 billion in 2000 to $132 billion in 2003.

At the same time, total discretionary spending, funding levels not set by law, increased 48.5 percent under Bush and the Republican-controlled Congress, according to an analysis by the Cato Institute, a Washington policy research organization that supports limited government. That includes increases of 104.2 percent for education, 161.6 percent for homeland security and 55.4 percent for veterans.

Less than one-fifth of the 8.8 percent annual increase in defense spending under Bush went to the wars in Iraq and Afghanistan, the Cato analysis says.

Comparisons

The rise in discretionary spending is more than twice as large as the increase under Clinton -- 21.6 percent -- and just more than the 48.3 percent increase in spending during the term of Lyndon Johnson, who pushed his ``Great Society'' social programs through Congress, according to Cato.

Tom Rath, a Republican National committeeman from New Hampshire, said the party's majority in Congress must curb spending before this year's elections.

Spending ``is an issue our base cares about,'' Rath said.

Illustrating the pressure from the Republican core, the Club for Growth, a Washington-based group advocating cutting taxes and spending, raised $1.9 million last year to support House candidates who agree with their priorities. That is 72 percent more than in 2003, the year before the last congressional election.

``If you don't get spending under control, eventually you're going to have a big tax increase,'' said Pat Toomey, a former Republican congressman from Pennsylvania who heads the group.

Reversing Course

Republicans in Congress are responding with a flurry of legislation. Representative Jeff Flake of Arizona has a bill that he says would limit the ability of lawmakers to insert special projects into spending legislation. Representative Marsha Blackburn of Tennessee is proposing a 5 percent across-the-board cut in discretionary spending outside of defense and homeland security.

Bush, who will submit his fiscal 2007 budget to Congress on Feb. 6, is trying to reverse course.

In his State of the Union address, he promised to reduce growth in discretionary spending outside defense and proposed a commission to study the cost of future entitlement programs. He said he will sign legislation passed Feb. 1 cutting $39 billion from government programs benefiting the poor, elderly and college students this year.

Joe Gaylord, a consultant to several Republican congressional candidates, said he's advising all of them to make out-of-control spending a key theme in their campaigns.

There are some ``candidates who are just running against the Congress,'' he said. Cranston Mayor Stephen Laffey, who is challenging Rhode Island Senator Lincoln Chafee in a primary, keeps handy a Power Point presentation of ``notorious pork projects,'' complete with swine graphics.

Phil Krinkie, who is running for an open House seat in Minnesota, bills himself ``the state's leading fiscal conservative'' on his Web site. Tarrant said spending restraint is a winning issue because Republicans in Vermont and elsewhere in the Northeast tend to emphasize fiscal issues more than social ones. ``That's pretty typical of Yankees,'' he said.

It may not be that simple.

``Tarrant has to be very, very careful how he plays the budgetary issue,'' said Bill Grover, a political scientist at St. Michael's College in Vermont. ``He's going to have to say, `We're going to balance the budget.' How?''

It's a question Tarrant is unable to answer. When asked what cuts Tarrant backs, his spokesman, Tim Lennon, declined to specify beyond ``pork barrel'' spending.

To contact the reporter on this story: Heidi Przybyla in Boston at hprzybyla@bloomberg.net.

Last Updated: February 3, 2006 00:04 EST