- The Washington Times - Sunday, August 15, 2004

A behind-the-scenes re-election strategy debate in the White House has been settled in favor of a bolder economic agenda President Bush wants to enact in his second term.

With the presidential race locked in a dead heat amid fears the nation’s economic recovery may be cooling, Mr. Bush has begun to talk up a series of “ownership society” initiatives he will be heavily promoting in coming weeks.

Republican advisers who have attended White House strategy meetings about the shape and substance of Mr. Bush’s campaign agenda have told me the president wants to propose a much more daring “to do” list on the economy than many of his supporters expected.

Among the proposals Mr. Bush is touting: private Social Security retirement accounts to let workers invest some of their payroll taxes in stocks and bonds; new incentives to expand homeownership; increased choices for health care through larger tax-free savings accounts; and letting businesses band together to offer medical plans of their own. Also in the works: tax reform to broaden the tax base and even lower tax rates, as President Ronald Reagan enacted in his second term.

“If you know anything about [White House political adviser] Karl Rove’s strengths, one of them is a sense of timing,” said a key strategist who advises the White House on economic policy. “What you will see forthcoming is a vision for a second term.”

This adviser adds, “I think you will see the emergence of what those core objectives will be as you move toward the [Republican] Convention.”

Last week, the White House released a brief “talking points” preview of its revised second-term economic agenda under the title “America’s Ownership Society: Expanding Opportunities.”

The items listed in this document have cheered the president’s conservative supporters, who have been urging the White House to fashion a more proactive economic agenda to run on in the general election for months.

“This president is known for big, bold initiatives, and I would expect nothing less when it comes to a second-term agenda,” said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors.

Sweeping tax reform was pushed by former Treasury Secretary Paul O’Neill in the first year of George Bush’s presidency, but was shelved by the White House when attention shifted to the war on terrorism. It has now been revived, and could well be a plank in the president’s re-election platform.

“You may see something major in the area of lower tax rates,” a Republican adviser to the White House told me.

Chamber of Commerce chief lobbyist Bruce Josten seconds that view. “I hear an awful lot about tax reform. But you would have to come up with a revenue-neutral plan at this juncture, with the size of the deficit that we have,” he told me.

But the boldest, most sweeping economic growth proposal in Mr. Bush’s re-election agenda is clearly his Social Security reform plan to let workers build investment wealth they would own, control and could pass on to their children.

Mr. Bush ran on partly privatizing Social Security in 2000, an idea particularly popular with younger workers and championed by Mr. Rove in White House strategy meetings. But the idea was also shoved aside after the September 11, 2001, attacks.

Now Bush is renewing his call to enact Social Security investment accounts in a second term, even making it part of his campaign stump speech. The prospect of dramatically reforming the venerable New Deal program has noticeably energized his conservative base.

“Bush opened the door for Social Security reform in the 2000 election,” said Jack Kemp, chief architect of the Reagan tax cuts. “He has continued to champion reform throughout his first term, and now he’s made Social Security a predominant part of his re-election agenda.”

Will all of this move Mr. Bush’s polling numbers upward? That remains to be seen, say Republican strategists.

“I still think the election won’t be a referendum on what he will do in the next four years, but a referendum of the policies he has already put in place,” said Stephen Moore, president of the pro-tax cut Club for Growth.

But Mr. Moore also thinks Mr. Bush needs to convey some big ideas about his plans for a second term. “He needs to talk about Social Security reform and moving toward a simpler, flatter tax system, because he’ll need some kind of mandate to do these things. And if he doesn’t talk about it, it won’t happen,” Mr. Moore said.

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

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