For Bush, no cakewalk in Congress
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This set of problems afflicted the second terms of Eisenhower, Nixon, Reagan, and Clinton to varying degrees. Most of the structural dynamics that hit them are there to hit Bush. Will he weather them any better?
In one area, especially, Bush is different from most of his second-term predecessors. He has big goals, wanting not to be a caretaker but to affect major, even revolutionary change in the nature and role of government. His top two priorities, akin to his push in 2001 for big-time tax cuts and education reform, are sweeping tax reform and a transformation of Social Security. Given his larger majorities in Congress, Bush will be tempted to use an approach similar to the one he used successfully back then on tax cuts: push a tough bill through the House on a party-line vote and then pressure the Senate, including squeezing Democrats vulnerable in 2006 (like Ben Nelson of Nebraska) or in red states (like Max Baucus of Montana) to go along, or at least forego filibusters.
But unlike in 2001, Bush's bold plans are nowhere near ready to unveil, and were barely discussed in the campaign. Social Security reform -- which for Bush is built around diverting one-sixth of the payroll tax into private, self-managed accounts -- requires up to $2 trillion in transition costs to cover the revenue lost to the system. This will involve either adding as much as $150 billion annually to the deficit or coming up with huge budget cuts elsewhere -- at a time when $70 billion more for Iraq and the soon-to-burgeon costs of the prescription drug plan will magnify the deficit problem.
The president's discussion of tax reform was even more limited than Social Security -- no specifics other than saying that a national sales tax was an interesting idea worth discussing. With no detailed plans ready to take off the shelf, it will be many months before a major tax reform proposal is ready to be sent to Congress. In the meantime, a continued push by Republicans to make the tax cuts of the previous four years permanent will complicate overall tax reform -- which might well propose erasing some of those newly permanent tax cuts, and would thus be unacceptable to many conservatives who oppose tax increases in any guise.
If history is any guide, Social Security reform and major tax reform will almost certainly require broad bipartisan support. But getting that support will not be easy -- and it is not clear if Bush will even seek it. Certainly, his ideological base and his lieutenants in Congress like Tom DeLay, with their own post-election hubris, will resist strongly any attempts by the White House to meet the losers of the election in the middle. Continued...