The President's economic policy announced last Tuesday in Chicago refutes the notion that today's disputes between the two parties express merely "the narcissism of small differences." The president spoke the day the 108th Congress convened, and what he said means that the 108th will bear some resemblance to the 97th. It convened in January 1981 and eight months later passed the landmark legislation of that decade, President Ronald Reagan's tax cuts.
The spirit of Reaganism was in the rubric that the federal government should "deliver the mail, defend the shores and get out of the way." In Chicago Bush said "the role of government is not to manage or control the economy... but to remove obstacles standing in the way."
Reagan was told he could not have both his tax cuts and his military buildup. He replied: We'll just see about that. Bush, told that he could not simultaneously prepare for war and again have significant tax cuts, proposed a $674 billion package rather than the $300 billion originally contemplated. Having been advised to mollify critics by merely cutting in half the taxation of dividends, Bush proposed elimination of that taxation.
All but $3.6 billion of the $674 billion is in tax cuts. The $3.6 billion is the president's only concession to the clamor for federal aid to the states. Their budgets rose an average of 7.5 percent a year--twice the inflation rate--during the boom years of 1995 to 2000, and now they face at least $70 billion in deficits ($35 billion in California). Democrats propose a $31 billion bailout.
The $3.6 billion would fund Personal Reemployment Accounts, which illustrate the differences between the parties. Democrats favor a simple 26-week extension for unemployment benefits, which would be a disincentive to seek employment quickly. Bush favors a 13-week extension of unemployment benefits, but the Personal Re-employment Accounts would give an unemployed person $3,000 to cover expenses incurred--including for relocation--in seeking employment. Those who find new jobs before exhausting their accounts could keep the unspent portion of the $3,000--an incentive to find work fast.
One Reaganite reason for tax cuts was political philosophy, not economic policy. It was "to starve the beast"--to constrain the growth of government by draining its reservoir of resources. Bush's proposal to accelerate and make permanent the $1.35 trillion tax cuts voted in 2001 would put in place, for years, high hurdles to Democratic agendas. Hence Democrats say Bush's tax cuts refute his claim to be a "compassionate conservative."
However, the day Bush spoke in Chicago, a re-elected governor delivered his Inaugural address outdoors, surrounded by state-government buildings. Exhorting people to be "more compassionate," he said:
"And if we are, we can embed in society a sense of caring that makes government less necessary. There would be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers, silent monuments to the time when government played a larger role than it deserved or could adequately fill."
So spoke Jeb Bush, who, like his brother, rejects the notion that the size of a government's budget is the gauge of society's compassion. Neither is a racial spoils system. So Washington is watching for President Bush to decide--Jan. 16 is the deadline--if his administration will file a friend of the court brief in the Supreme Court cases about racial preferences at the University of Michigan and its law school.
Undergraduate applicants are awarded "points," with 150 being the maximum. African-Americans, Native Americans and Hispanics are automatically awarded 20 extra points. (A perfect 1600 SAT score is worth only 12 points.) The law school rewards race and ethnicity differently, but so heavily that members of those three preferred minorities are more than a hundred times more likely to be admitted than other students with comparable academic credentials. Administrations rarely refuse to file briefs in such important cases.
The day Bush spoke in Chicago, the White House announced his intention to renominate to the U.S. Fifth Circuit Court of Appeals two judges rejected last year by 10-9 party-line votes in the (then) Democratic-controlled Senate Judiciary Committee. One of the judges is the choice of Trent Lott.
The day before the Chicago speech, Republicans announced that their 2004 convention would be in New York City--in Madison Square Garden, just four miles north of Ground Zero, where Bush, speaking through a bullhorn, defined himself and his presidency. The choice of New York for the convention indicates that he will run as a war leader--and might not concede New York state, where in 2000 he was trounced by 25 points.
All of this means that Bush's Chicago speech should have been noted in Baghdad. The speech showed that the president, whose feistiness seems to have increased after the November elections, means what he says and does not flinch from a fight.