Bush to Convene Economic Summit

With key congressional Republicans urging President Bush to move more quickly on Social Security reform and a tax code overhaul, the White House announced today that the president would convene a high-profile economic summit in mid-December to lay the groundwork for his twin initiatives.

At the same time, the White House is in the final stages of assembling a blue ribbon advisory panel on tax reform that also is expected to help Bush advance his plan to simplify the tax code.

The two-day summit, with as many as six panels, is modeled after one that Bush called in Waco, Texas, in the summer of 2002 as the nation was struggling to recover from the previous year’s recession.

Widely regarded at the time as a carefully scripted public relations effort, the session nevertheless helped set the stage for one of Bush’s across-the-board tax cuts. The initiative included a tax reduction on dividends — an idea that Wall Street discount broker Charles Schwab had touted during the Texas forum.

White House Press Secretary Scott McClellan said that while details of this month’s summit are still being worked out, the plans call for the president, Vice President Dick Cheney and other Cabinet officials — as well as outsiders — to lead the panel discussions.

He said healthcare, education, budget discipline and legal reform also would be addressed.

“The conference will be an opportunity to discuss what we must do to keep our economy growing and to make sure America remains the most competitive economy in the world,” McClellan said.

Since his reelection a month ago, the president has immersed himself in the task of revamping his economic team, which assumed a relatively low profile amid the wars in Afghanistan and Iraq.

But now, as Bush seeks to allow workers to divert a portion of their Social Security taxes into private accounts, and to reshape the tax code, he is in the process of replacing a majority of his key economic advisors.

The president already has named Carlos Gutierrez as Commerce secretary, replacing Don Evans. Bush is considering replacements for White House National Economic Council Director Stephen Friedman, who is stepping down. In addition, N. Gregory Mankiw, chairman of the president’s Council of Economic Advisors, is expected to resign soon.

At the White House, McClellan did not dispute the notion that the two-day summit was at least in part an effort to build and shape public opinion for Bush’s agenda.

“The conference will be an opportunity to discuss what we must do to keep our economy growing and to make sure America remains the most competitive economy in the world,” he said.

The president has set an end-of-the-year deadline for the creation of an advisory panel on tax reform, which would report back to the Treasury secretary, tailoring its work to meet the president’s previously stated principles, which McClellan described this way:

“He wants to make it fairer and simpler, and he wants to make sure that our tax code encourages economic growth. So that’s the broad mandate for the bipartisan advisory panel.”

Bush also has stated that he would want a tax code overhaul to remain “revenue neutral.”

On Capitol Hill, many Republicans, while supportive of Bush’s plans for a tax code overhaul and a partial privatization of Social Security, are urging the president to move quickly. They say that Bush’s imminent lame-duck status would offer the White House and congressional Republicans a relatively short window of opportunity — perhaps less than a year — in which to enact such reforms.

Senate Financial Committee Chairman Charles Grassley (R-Iowa) said in a Wall Street Journal article today that the president needed to unveil his tax reform plan by no later than March 1 — about six months earlier than current White House anticipation.

But McClellan said such concerns are unfounded.

“This president laid out a very bold agenda for the second term. He’s firmly committed to it. We’re going to work very closely with members of Congress on both sides of the aisle who want to reform the tax code and get this done,” the spokesman said. But he added: “I think it’s too early right now to start getting into timetables, specific timetables.”

Economist Bruce Bartlett, a former Treasury Department official in the first Bush administration, said the summit appeared to be more of an exercise in public outreach than an effort to rethink the administration’s economic policy.

But he conceded that such a conference could prove beneficial.

“The main virtue of this kind of event is that it forces the president to focus intently on economic issues, at least for a couple of days, to the exclusion of everything else that intrudes upon his time,” Bartlett said. “So I don’t think it’s a complete waste of time.”