- The Washington Times - Monday, December 2, 2002

There is now no doubt that President Bush will ask the new Republican-run Congress to pass a tax-cutting stimulus bill to reinvigorate the nation's lackluster economy.
The president, who admitted in his campaign stump speeches that the economy was "just bumping along," is being urged by his top advisers to speed up the tax cuts enacted last year.
"Accelerating the tax cuts is very high on our list," a key administration official told me.
Bruce Josten, chief lobbyist for the U.S. Chamber of Commerce who has participated in White House economic strategy meetings, now says that, "there will be a stimulus package of some kind. I have no doubt about that."
Mr. Bush has made no final decisions about what he wants in the plan, but the proposals before him last week were bold and far-reaching, according to White House officials. Among them: Moving up the income tax cuts that are now scheduled to take effect in January 2004 and 2006, making the tax cuts permanent, including repealing the estate tax; and cutting the tax on dividends and capital gains to boost stock values and encouraging investment and venture capital.
The plan will most likely include proposals to expand contribution limits for Individual Retirement Accounts and 401(k)s and additional tax cuts for businesses to invest, expand and create jobs.
The White House is also considering a wide range of other ambitious policy initiatives. Emboldened by the mandate he won in the congressional elections, Mr. Bush seems ready to spend some of that political capital on some big reforms.
"Maybe we can now go after things that we thought were tougher nuts to crack and that we have been putting off," a White House adviser told me. "With the mandate from this election, the president can go after two or three more things in the new Congress.
"The game has changed so much [since the elections]. Everybody had to take a step back and realize what is possible now. It's a matter of reprioritizing what you can do in this new political environment that you could not do in the previous environment."
But what else will Mr. Bush do with this mandate? And how much of that capital is he willing to spend?
A number of major, marked reforms are sitting on his desk awaiting a presidential decision. There is his unprecedented Social Security plan to let workers invest a part of their payroll taxes in stocks and bonds. Despite the pounding it took from Democrats this year, public support for the idea rose and Bush advisers such as Karl Rove want him to press Congress to take it up next year.
Another proposal Mr. Bush might push: a generous tax credit to help pay for health-care costs among the insured to counter a Kennedy-Gore plan to enact a federally financed, big-spending, single-payer plan.
But besides a likely war with Iraq and preventing another terrorist attack, energizing an anemic economy remains at the top of his agenda. The advice the president is getting from chief economic adviser Larry Lindsey is that this economy needs all the tax-cut help he can give it.
In a recent interview, Mr. Lindsey declined to comment on a stimulus package, but did paint a mixed, somewhat pessimistic picture of the U.S. economy.
"On the good news side, productivity seems to be very strong and that suggests growth long-term is likely to be at a faster rate," he said. "On the other side, we face the uncertainties of war and terrorism, and that has economic and psychological effects that are very difficult to evaluate or predict."
The bottom line in the economy's future, he added, is that "uncertainty is high."
When Mr. Lindsey crafted the Bush income tax rate cut plan in 2000, he said it was "an insurance policy" against a downturn in the economy. He had predicted for years that the 1990s' bubble would burst. When it did, and the United States slid into a recession, the Bush tax cuts were there to make that downturn one of the shortest in memory.
Now, with the economy slowing down in this fourth quarter and with business economists forecasting a further slowdown in the first three months of the new year, Mr. Lindsey is recommending that the tax cuts be stepped up as an insurance policy.
Asked if Mr. Bush is likely to move in that direction, Mr. Lindsey says, "We may."
It can't come too soon for this White House. No matter how successful the war against terrorism might be, or how quickly a war with Iraq is won, a weak economy could still make Mr. Bush a one-term president, as it did for his father.
The two-year campaign cycle for the 2004 election begins in earnest next month and the fate of Mr. Bush's presidency could be decided by the kind of stimulus package he sends to Capitol Hill in January.

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


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide