Bush refocusing on private retirement accounts
WASHINGTON – A behind-the-scenes re-election strategy debate in the White House has ended in favor of a bolder economic agenda that President Bush wants to enact in his second term.
With the presidential race locked in a dead heat amid fears that the nation's economic recovery may be cooling, Bush has begun to talk up a series of "ownership society" initiatives that he will be heavily promoting in the coming weeks.
Republican advisers who have attended White House strategy meetings about the shape and substance of Bush's campaign agenda have told me that Bush wants to propose a much more daring "to do" list on the economy than many of his supporters expected.
Among the proposals 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 home ownership; 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 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.
Former Treasury Secretary Paul O'Neill pushed comprehensive tax reform in the first year of George Bush's presidency, but the White House shelved it when attention shifted to the war on terrorism. It now has revived it, and it 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 GOP adviser to the White House told me.
Bruce Josten, the Chamber of Commerce's chief lobbyist, 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 far-reaching economic growth proposal in Bush's re-election agenda is clearly his Social Security reform plan to let workers build investment wealth that they would own, control and could pass on to their children.
Bush ran on partially privatizing Social Security in 2000, an idea that is particularly popular with younger workers, and Rove has championed it in White House strategy meetings. But that idea also fell aside after the 9/11 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, the 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 Bush's polling numbers upward? Republican strategists say it's too soon to tell.
"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's already put in place," said Stephen Moore, president of the pro-tax cut Club for Growth.
Copyright 2004, United Feature Syndicate, Inc.