The Ups and Downs of the Economy : Is the recession the President’s biggest enemy? Or the Democrats? : The Opposition: Bush Picks His Shots

President Bush labored for 10 weeks on his State of the Union address, and he brought forth a metaphor. “We can bring the same courage and sense of common purpose to the economy that we brought to Desert Storm,” the President declared on Jan. 28.

Once again, the nation saw a feisty, tough and determined George Bush standing firm against the unyielding foe. “I look at hard times and I make this vow,” the President said, reviving the most memorable phrase of his presidency: “This will not stand.”

In the President’s metaphor, the recession is the invasion of Kuwait. Congress is Iraq. But who is Saddam Hussein? The Democrats, of course. Their control over Congress is absolute and tyrannical. They will not reform. They cannot be dislodged. Incumbency is their bunker. Special-interest money is their oil. And the minority Republicans are the oppressed Kurds.

It was the mother of all metaphors. The President even imposed a deadline. “I submit my plan tomorrow,” the President warned the enemy. “I am asking you to pass it by March 20. . . . From the day after that, if it must be: The battle is joined.”

The metaphor falls apart, however, at one crucial point. The President isn’t armed. The only weapon he can use against Congress is a defensive one--the veto. Congress fires Scud programs at the White House, and the President shoots them down with his Patriot vetoes. In fact, the veto has worked better than the Patriot missile. The record so far: 24 Scud attacks, 24 veto hits.

But the speech last week didn’t have many new offensive weapons. Most of them, like the President’s proposal for a capital-gains tax cut, were recycled from previous wars. They didn’t work then, and Congress isn’t afraid of them now. Especially since the President has so little support from the home front. Bush’s job rating is down to 43%, the low point of his presidency. With ratings like that, the enemy isn’t too fearful of what he can do to them.

The point of the speech was to rally the troops. The Administration spent the last three months building up expectations. “It’ll all be in the State of the Union speech,” Bush said, resisting pressures to announce a recession-fighting program earlier. Some two-thirds of the U.S. public said they watched the speech. That’s the biggest audience the President is likely to get until he addresses the Republican National Convention in August.

Did it work? “Good delivery, poor message,” was the consensus among reviewers. The public seemed to feel the same way. Those who watched the speech expressed greater confidence in Bush, according to a CNN-USA Today poll. But they were split over whether Bush’s program was likely to get the country out of recession.

The plan was a compromise between economic advice and political necessity. Most economists advised Bush to offer a restrained package. They say a modest recovery is on the way, and they didn’t want the President to overstimulate the economy or get into a bidding war with Congress that might worsen the deficit.

But political necessity demanded that the President act boldly. So the President made a bold speech in which he announced a modest and restrained program. For all the fanfare, the entire package could have been proposed six months ago.

The speech was billed as the defining moment of the Bush presidency. But it never defined any particular vision of the future. What Americans wanted from the President was a sense of direction. What they got was a hodgepodge of tax breaks.

Bush is not an ideological President, and he is paying a price for it. His economic program has no particular coherence or consistency. It includes some liberal ideas--increasing funding for Head Start, extending unemployment benefits, canceling new weapons programs. And some conservative ideas--a 90-day moratorium on new federal regulations, a freeze on discretionary domestic spending, welfare reform. As the Talmud says, “If you don’t know where you’re going, any road will get you there.”

The specific items on the President’s agenda are all popular. Who can argue with the idea of raising the tax exemption by $500 per child, or giving first-time home buyers a tax credit of up to $5,000? But it’s not clear what all these proposals add up to. What are they going to do for the economy? Economists aren’t sure, and neither are the American people, according to those polled afterward.

It’s hard for people to “stay the course” if they have no idea what the course is. Bush has always had problems with “the vision thing.” He’s a pragmatist: “Is it sound and will it work?”

That’s the second weakness of the President’s program. Like Bush, Americans are practical. They want jobs. But they don’t see the connection between job growth and the various tax breaks the President is proposing. What kinds of jobs are being created? Who’s going to get them? Bush’s program is not only weak on vision. It’s weak on solutions.

Bush is playing Congress’s game: Christmas-tree politics, a little something for everyone. The program includes something for the rich (a capital-gains tax cut, repeal of the luxury tax). It has something for the middle class (penalty-free IRA withdrawals for medical and educational expenses, interest deductions for student loans). There’s even something for the poor (tax credits for health insurance, tax incentives for low-income housing). But it’s a game Bush can’t win. Congress will always outbid him.

Nor is it clear that Americans want him to play that game. The public relies on Congress for goodies. What they want from the President is growth. The Democrats’ specialty is protecting and providing. They have always been rated better than the GOP for dealing with poverty, health care, unemployment, education and the homeless. The motto of the Democratic Party is, “You’ve got a problem. We’ve got a program.”

Americans like those programs. That’s why they keep electing Democrats to Congress. But Americans know what all those programs have done to the economy. That’s why they blame Congress much more than the President for the nation’s economic problems. The President’s job is to straighten problems out.

From 1983 to 1990, Republicans did just that. As a result, they were usually rated better than the Democrats at managing the economy. Middle-class voters don’t want programs. They want prosperity.

A year and a half into the recession, the Republicans have lost their advantage as the party that can do a better job of managing the economy. The State of the Union speech was supposed to turn that image around. Instead, the President tried to beat the Democrats at their own game.

What could he have done? The 1990 budget agreement outlaws any bold economic stimulus program. Liberals can’t talk about major public-spending programs. Conservatives can’t talk about serious tax cuts. The deficit won’t allow it.

But the budget deal was unpopular when it was passed in 1990, and it’s unpopular now. Both liberals and conservatives want to renegotiate it. As the President said in his speech, times have changed. We live in a new era. The Cold War is over. The biggest threat to the nation’s security is now economic.

The President could have made a bold and dramatic gesture. He could have called for a new budget agreement--a postwar reconstruction budget, with the peace dividend invested in rebuilding the economy. The President had a perfect opening. He reminded the world that “the American taxpayer bore the brunt of the burden” of winning the Cold War. How about a reward? Like funds to help hard-pressed states give their citizens tax relief. And new public-works programs to repair the nation’s infrastructure.

The President didn’t do it. He said in his speech, “There are those in Congress who would ease (fiscal) discipline now. But I cannot let them do it--and I won’t.” Why not? Because he was afraid of Wall Street. He didn’t want to scare the financial markets or make the Federal Reserve system nervous.

Bush has accepted the view that low interest rates will be enough to stimulate a recovery. His budget is a political palliative, not a recovery program. It’s the domestic equivalent of the new foreign policy the Administration came up with in 1989, after a six-month review to figure out how the United States should meet Mikhail S. Gorbachev’s bold challenge. They called it “the status quo plus.”

So what’s Bush going to do if Congress doesn’t pass his program by March 20? That’s the “April surprise” the Administration has been hinting at. The talk is that we’ll go into Iraq and take out Hussein. Then the President’s metaphor will be complete: Let that be a warning to Congress.