Larry Kudlow
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The New Hampshire primary may not have confirmed who’s going to win the GOP nomination (or the Democratic nomination for that matter). But it just may have told us where voting Republicans stand on the economy and supply-side policy.

Exit polls in New Hampshire reveal that the most important issue for Republican voters is the economy at 31 percent, trailed by the war in Iraq at 24 percent, illegal immigration at 23 percent, and terrorism at 18 percent.

Overall, 54 percent of New Hampshire voters said that reducing the budget deficit is the highest priority for the next president, while 44 percent believe in cutting taxes. And it’s from here that an interesting split develops between Sen. John McCain and Gov. Mitt Romney. While McCain leads Romney 41 percent to 21 percent on the economy, McCain is the voters’ deficit-cutter of choice while Romney is the voters’ tax-cutter of choice.

Of the deficit cutters, McCain boasted a 20 percent lead over Romney, 46 to 26 percent. Of the tax cutters, Romney led McCain by 10 points, 37 to 27 percent.

McCain, of course, voted against the Bush tax cuts in 2001 and 2003, while Romney didn’t support them as governor of Massachusetts. Noteworthy, however, is the fact that McCain favored the Reagan tax cuts in the 1980s, while Romney indicated a lack of support for the Reagan program during his unsuccessful 1994 Senate run against Ted Kennedy.

So McCain should be leading on the tax issue. But hard-line tax-cutting strategists like Cesar Conda and Vin Weber have been working to position Romney as a supply-side tax-cutter. According to the New Hampshire results, this is paying off.

But the key development is that supply-side policy is finally getting its due on the GOP campaign trail.

McCain’s message of cutting federal spending and eliminating budget earmarks is hitting home. More and more voters seem to be worried about excess government spending, and McCain remains the favorite on this issue. But McCain is now talking more like a spending and tax cutter, drawing the endorsement of time-tested supply-sider Jack Kemp and long-term deficit-spending foe Phil Gramm, the former Texas senator. Critically, McCain has pledged to make the Bush tax cuts permanent.

The Bushies, incidentally, are preparing a very weak-kneed temporary-tax-rebate plan that doesn’t feature any big-bang supply-side cuts, such as a significantly lower corporate tax rate. I can’t figure out why President Bush -- who declared himself a supply-sider last year -- is proposing a demand-side Democrat-type plan that simply mails checks without any tax-rate-changing incentive impact.

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Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.