Careful What You Wish For

One hopeful sign is that Bush himself is beginning to prepare the ground for his successor. Whereas in his first term he seemed to go out of his way to ignore opposition, the president is trying now to create "sustainable" policies that will survive his administration—even if he is succeeded by a Democrat. Bush is negotiating a long-term strategic partnership with Iraq. He's also directed his commander, Gen. David Petraeus, to look for ways to reduce the U.S. troop presence well below the 130,000-person force expected to be remaining in July. The result is that on a number of key issues—Iraq, Iran, Mideast peace, North Korea—the next president is more likely to take up where Bush left off than to strike out boldly on his (or her) own.
—Michael Hirsh

Economy: A Meager Inheritance
Upon assuming office, the president becomes the chief executive officer of the U.S. economy—a chaotic, unwieldy and temperamental organization over which the boss, in fact, has little control. And it's always the unknown unknowns (hat tip, Donald Rumsfeld) that bite highflying CEOs in the rear.

There are, however, a few of what Rumsfeld might call "known knowns" that are worth considering. First, it's a near certainty that on Jan. 20, 2009, the president will face a population eager and impatient for economic growth. The last two recessions (in 1991 and 2001) each lasted eight months, according to the National Bureau of Economic Research. But come next January, the American people won't necessarily feel flush. Companies no longer simply recall laid-off workers to factories when business turns around; they invest in productivity-boosting equipment and outsource. Which is why job growth in the aftermath of the last two recessions has been anemic. The economy began expanding in November 2001, but employment declined through the fall of 2003. Data may indicate the bus is in gear, but passengers—and their representatives—will be screaming for the driver to step on it.

The ability to further stimu-late the economy—through tax cuts or spending increases—will be constrained by a second known known: the budget deficit. Slowing economies bring higher spending—more money spent on unemployment benefits, greater demand for social services—and lower tax revenue. And so the fiscal picture will undoubtedly be worse next January than it is now. In January 1993, as Bill Clinton was poised to take office, the first Bush administration revealed data showing the projected deficit for 1997 would be $60 billion greater than expected. So whether it's making the Bush tax cuts permanent or covering uninsured children, it will be tough to follow through on campaign promises. The new president should thus be prepared for a tough internal debate—as happened in early 1993 between economic adviser Robert Rubin and Labor Secretary Robert Reich—over which priorities are affordable.

The main piece of advice? Don't succumb to self-pity. The current crises in housing and credit aren't nearly as bad as the situation that Ronald Reagan inherited in 1981, when mortgage rates were nearly 15 percent. When Franklin D. Roosevelt took the reins of, as he put it in his Inaugural Address, "a stricken nation in the midst of a stricken world," in the spring of 1933, banks in 32 of the 48 states were closed, and unemployment was rampant. And yet he managed to project confidence, optimism and empathy. "It is your problem," Roosevelt said, "no less than it is mine. Together we cannot fail."
—Daniel Gross

Health Care: A System On Life Support
The numbers are staggering, but no longer shocking: about 47 million Americans are uninsured and millions more struggle to pay expensive health-insurance premiums. Recent surveys by the Henry J. Kaiser Family Foundation, a private nonprofit focused on health-care issues, find that more Americans are now worried about their health-care costs than about losing their jobs, paying their mortgages or being the victim of a terror attack. "There's a big decision for the next president about whether to make health reform a big priority," says Drew Altman, CEO of the foundation.