- The Washington Times - Monday, December 25, 2000

Americans have a lot to be grateful for this Christmas season. Our country is at peace. We have chosen our

43rd president under trying circumstances, but without political or social upheaval. The U.S. economy, despite its continuing weaknesses, is at full employment and in the longest expansion in our history.

Elsewhere, though, the post-Cold War world remains a dangerous place. Terrorists, our most deadly enemy, plot to blow up U.S. facilities and kill Americans here at home and at distant outposts, challenging our global security apparatus as never before in our history.

The Middle East, a bubbling cauldron of hatred and revenge, remains as explosive and insoluble as ever, with megalomaniacs like Saddam Hussein ready to exploit the region's instability for their own strategic gains, if they can. Russia, crippled by corruption and sitting on thousands of vulnerable nuclear warheads, still has not been able to put together a truly democratic political and economic infrastructure.

Here at home, President Clinton's embarrassing, scandal-ridden, roller-coaster term in office is about to come to an end as a new president, George W. Bush, prepares to take the reins of power and turn government policymaking in a distinctly conservative direction.

Mr. Bush takes office after one of the narrowest and bitterest presidential elections in U.S. history, surviving a harrowing constitutional process that tried and tested this nation's strength, unity and resilience.

To his credit, he has set about in word and deed to heal the divisions, first with his extraordinary visit last week to Capitol Hill, where he reached out to the Democratic leadership in a spirit of bipartisanship and cooperation, and second, by choosing people of the highest caliber to staff his administration from across the social, political and racial spectrum of our society.

Choosing Colin Powell, the first black man to be secretary of state, and Condoleezza Rice, the first black woman to be national security adviser, did not just show good judgment on Mr. Bush's part. The appointments showed once again, in a very dramatic way, that no matter what your background or race, this is a country where you can become anything you want to be if you are willing to work hard to achieve your dreams.

Mr. Bush is going to need the best talent he can find for his administration because he has his work cut out for him and he has a lot to prove.

Certainly his biggest challenge in the coming months will be to halt the nation's economic decline and keep the United States from sliding into a recession.

When Mr. Bush met with Mr. Clinton last week, the president said that he was handing over a strong economy to the incoming president. Well, not exactly. The weakening economic numbers that have been tumbling out of the government and the Federal Reserve Board tell a much different story.

For several years now, the economy has been cruising along at about a 5 percent growth rate. That has now slowed to 2.2 percent at best, and there are signs that this rate of decline is accelerating.

Banks have tightened credit requirements, creating a serious liquidity problem. Consumer spending is down and retail sales have been weak. In fact, this may be the weakest Christmas selling season since 1990.

Car sales are down. Home sales have dropped. Manufacturing is in a steep decline. Layoffs have begun to climb and job creation is soft. Consumer confidence indexes have fallen, too, as Americans have seen their mutual fund investments shrink by one-third to one-half of their value since the beginning of the year.

Fed Chairman Alan Greenspan has acknowledged his concern about the weakening economy, but he did not, as Wall Street hoped, cut interest rates last week to give the economy the liquidity booster shot it so desperately needs. That may come next month, he signaled, a decision that has angered Bush advisers.

That's why Mr. Bush and Vice President-elect Richard B. Cheney were sending signals all over the place last week that tax cuts were essential to keep this economy from declining further and, perhaps, slipping dangerously close to a recession next year. In his meetings with Republican leaders, Mr. Bush made it clear that he was not backing down from his across-the-board income-tax-rate-reduction plan.

Both he and Mr. Cheney, who is using the recession word more frequently, are telling congressional leaders that a strong tax cut is needed early to strengthen the economy. "Tax cuts are no longer an option, they are a requirement. The risks are real, and they are here," a senior Bush economic adviser told me.

That's why a deeply worried Philip M. Crane, Illinois Republican, the odds-on choice to become the chairman of the tax-writing House Ways and Means Committee, told me last week that he intends to hold accelerated hearings as early as the second week in January on tax policy.

Mr. Bush and Mr. Cheney know that their administration's political credibility will largely depend upon a vigorous economic growth rate. And right now that growth rate is pointing down.

Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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