Bush's second-term domestic agenda far weightier than first

Posted: Sunday, November 14, 2004

WASHINGTON From his domestic policy platter, President Bush chose to serve dessert before the main course.

He accomplished the things that were palatable and relatively easy during his first term, and which required little sacrifice for Americans, at least on the home front: hefty tax cuts to spur a stumbling economy, education legislation that promised to leave no child behind, adding a prescription drug benefit to Medicare.

The meatier stuff was put off: making those tax cuts permanent and ''fundamental reform'' of the tax laws, overhauling Social Security to allow private investment accounts, easing immigration restrictions, cutting the deficit in half within five years.

Having now won a second term, the president may find it increasingly difficult to deliver on those promises, even with the political capital he is claiming and larger GOP majorities in the House and Senate.

Given that the federal budget was $413 billion in the red last year, Bush lacks much of the traditional capital available to spend on his priorities.

''Making the tax cuts permanent would drain about a trillion dollars of revenue, at about the same time you would need an extra trillion or more for the Social Security plan,'' said Robert Bixby, executive director of the Concord Coalition, a bipartisan group advocating fiscal responsibility.

''And the plan to cut the deficit in half assumes that we don't spend any more on Iraq or Afghanistan, which is not a reasonable assumption,'' Bixby said.

Bush may discover that it isn't just outnumbered Democrats that will give him a headache.

Unless the economy takes off and conditions improve markedly in Iraq, the president may find increased restiveness among the GOP, and this only will intensify as the 2006 midterm congressional elections approach.

Republicans united to resist the candidacy of Democrat John Kerry for president. Now that the election is over, GOP majority-party strains are beginning to show even before Bush's second term begins.

Conservatives who are deficit hawks are unhappy with Bush's spending plans and his failure thus far to use his veto. Social conservatives want him to do more to advance their agenda and some are peeved about his push to liberalize immigration.

On foreign policy, extricating the United States from Iraq poses a far more daunting challenge than did the march to Baghdad. Some top Republicans, including Senate Foreign Relations Chairman Richard Lugar of Indiana, have expressed frustration at the cost and chaos of postwar Iraq.

Right after his victory, Bush claimed ''the will of the people at my back.'' While there is no doubt that Democrats are in a state of disarray, there are practical limits to what the president can deliver, despite his optimism.

''He probably has a better chance of pushing his Social Security program than he does at tax reform,'' said Henry J. Aaron, an economics analyst at the Brookings Institution. ''I think you can move the pea around under the shell a little more readily on Social Security.''

Aaron said overhauling the tax laws is ''in essence tax redistribution. It involves taking goodies away that people now enjoy.''

Bush wants fundamental changes of ''our complicated and outdated tax code'' and says they should be ''revenue neutral.'' He has proposed a bipartisan commission to come up with recommendations, but that is about as far as he has gone.

Many conservatives would like Bush to move toward a simplified flat tax or a tax on consumption, such as a national sales tax.

There is a widespread clamor for him to ask Congress to modify the alternative minimum tax. Designed to prevent high-income people from taking too many deductions, the tax was never indexed for inflation, so it is starting to hit many middle-class families.

White House officials give little guidance or details.

''It's too premature to speculate, when an advisory panel hasn't even been appointed,'' White House spokesperson Scott McClellan said. ''The president said this is going to be a top priority for him.''

On Social Security, Bush also has not said much beyond repeating his 2000 mantra that younger workers should be allowed to invest a small portion of their Social Security funds in personal retirement accounts.

Veterans of the legislative process expect it to take many months, perhaps all of Bush's second term, to get to final votes on his Social Security and tax overhaul plans.

''The schedule gets really short once you start taking out the stuff Congress has to do. A lot is going to be left on the cutting room floor,'' said conservative economist Bruce Bartlett, director of the National Center for Policy Analysis.

Tom Raum has covered Washington for The Associated Press since 1973, including five presidencies.

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