West Wing Story: Hey, Uh, How's That Economy Doin'?

"Lawrence," George W. Bush said to his chief economic adviser Larry Lindsey last week, "How's the economy?"

It's a question Bush asks him almost every time he sees him. Lately he's been seeing a lot more of Lindsey and the rest of his economic team. Every few days, they get about 45 minutes with him in the Oval Office. It's a select group that includes Lindsey, Budget Director Mitch Daniels, Chairman of the President's Council of Economic Advisers Glen Hubbard and, when he's around, Treasury Secretary Paul O'Neill. Bush doesn't ask them about the market; he doesn't even want to know the day's unemployment numbers or the current GDP. "What he's interested in is looking ahead," say a senior White House official. "He jumps forward to the next half year or next year."

Bush, his aides insist, is focused on long-term economics over short-term politics. But as the midterm elections approach, that's getting blurry. Everywhere Bush goes he talks about how our "economic fundamentals are strong." He generally avoids getting sucked into discussions of market fluctuations. But this week, despite his repeated protestations to reporters that he is "not a stockbroker," he touted the "value" of the market and stressed the importance of diversifying. Bush has been on the defensive: he had to stand up for his Treasury secretary again against criticism that he has been ignoring his domestic economic duties for international travel. Bowing to pressure, O'Neill cancelled a business trip to Latin America next week. Now Bush is poised to sign a corporate-reform bill that contains a lot of provisions with which he and his economic team disagree.

There's been a struggle behind the scenes lately between his economic and political team over the corporate clean-up bill that should pass by next week. The reform plan that Bush offered in New York a few weeks ago was not as tough as some of his political advisers would have liked-and not nearly as tough as the legislation about to pass on Capitol Hill. But Bush's economic team-and his vice president, who shares their invisible hand economic philosophy-were cautious. "The political team will say that people want to see the president take robust action," explains one top adviser. "The policy people will say not all robust action makes sense. It will be up to the policy people to draw the balance."

The economic team won out on the controversial issue of expensing stock options, for example. Bush took a personal interest in the issue. One aide describes the president peppering him with questions about whether the Senate corporate-reform bill included the provision. It doesn't. But there is political support for the idea. Fed Chief Alan Greenspan is for it, and Coca-Cola and a few other big companies have decided to expense stock options voluntarily. "The politically easy thing to do would be to jump on that issue," explains a senior White House adviser. "It's not always easy to be in a different position from Chairman Greenspan."

The president hasn't always sided with his economic team. He agreed to protectionist steel tariffs that directly contradict his free-trading rhetoric and signed a pork-laden farm subsidy bill, both for political gain. The corporate-reform bill that will soon make its way to his desk is another triumph of politics over economics. Many on Bush's economic team think some of the provisions-rushed through before Congress' August recess-could do more harm than good. Extending the time limit for suing corporations, for example, could, some believe, unleash a flurry of lawsuits and be a boon for trial lawyers. Bush's economic team believes that the system isn't really broken. But the political team needs to show Bush fixing it anyway. Bush will sign the bill as is and, if he can, take credit for it.

There is one area where the economic and political teams always agree: tax cuts. Bush and his whole team believe in them economically-even now with the deficit rising. In fact, Bush wants to make them permanent. That appeals to both free marketers and Bush's conservative political base. And to Democrats, who are going to use the deficit against Republicans in the fall.