Dear Chris, Walter,
I read over the weekend a poll reporting that 87 percent of Americans consider this year's State of the Union address as important or more important than last year's. This may be one of those trick polling questions: Of course a speech given today is more "important" than one that has faded into memory, just as today's weather is more important than last week's. But the question also reflects something real. President Bush is in a pickle and will need ingenuity to get himself out. For all the president's political successes in his first two years, and despite an approval rating still comfortably over 50 percent, he's reaching his push-comes-to-shove moment on Iraq without having prepared the country for war. This European unease is leaking into the American debate and making people jittery. The president's domestic problems and his foreign problems are beginning to act on, and complicate, one another. One wishes him luck. (Prays for it, in fact.) But one can also begin to imagine how his presidency could turn Carteresque.
The best metonym for Bush's ills is the off-the-point dividend tax cut he announced three weeks ago. First problem: I'd be less put off by the supply-side bias of these cuts if the president hadn't so consistently urged a demand-side remedy to the problems of running a war economy. In the wake of Sept. 11, Bush admonished us to keep the economy rolling through visits to the mall and vacations in our beautiful natural parks. Apparently the poor are supposed to do this on their own nickel, because there is not a scrap of payroll tax relief in this entire unaffordable plan. The plan's effects on corporate governance may be terrific, but an "across-the-board tax cut" it ain't. The rich get money; the middle class gets patriotic exhortations to spend. Not the most galvanizing wartime role.
The second problem is straightforwardly political. I see the rationale behind "giving back to those who pay most." But disproproportionate cuts for the rich rest on an antiquated estimate of public sentiment. House speaker Dennis Hastert said last week, apropos of something else, "If you just talk about tax cuts, it kind of goes over the top of the average American's head." Wrong-oh. Accusing Democrats of "class warfare" ends the argument in an era of 77-percent marginal tax rates. But in the decades since top rates stabilized in the '30s, Americans do ask who ponies up and who cashes in. What was the undoing of Newt Gingrich? The government shutdown is the picturesque explanation, but the substantive one is that in 1995 he put forward a budget calling for $245 billion in tax cuts, to be paid for out of an almost exactly equivalent amount in Medicare cuts.
The third—and key—problem is the way this kind of economics interacts with war-fighting. If you plan to ask the general public for wartime risks and sacrifices, it's imprudent to increase the percentage of poor and middle-class people who perceive themselves as being taken for a ride. If the Bush economic plan were sellable as a stimulus for all, his problems would be ephemeral. I suspect it's not, and it has already cost him eight points in the polls. He may soft-pedal the plan in the speech, but it's too early for him to give it up.
So, how does he recover tomorrow night? We know his speech will be short and that we shouldn't "expect any declaration of war," as White House aide Dan Bartlett put it. Beyond that, there has been little leakage, and we have only the merest outline of what'll be in Hans Blix's U.N. report today. Perhaps the president will square the circle by changing the subject. If, as expected, he addresses the question of a prescription-drug benefit for seniors, he can wrong-foot his foes by applying the same Monopoly-money standards to spending that he does to taxation. In place of that timid, tepid, insipid, flaccid Democrat plan, he should offer his own alternative worth eleventeen hundred gazillion trillion dollars.
Christopher Caldwell is a senior editor at the Weekly Standard. His book Reflections on the Revolution in Europe: Immigration, Islam and the West will be published in the United States in July.