A Kerry Presidency Jude Wanniski November 1, 2004

For the sake of discussion, let`s assume Senator Kerry wins tomorrow and becomes the 45th President next January. What might we hope for and what can we expect? To begin with, I also assume that Congress remains in Republican hands and that they may even pick up a few seats in the House and Senate. However, if the turnout is as spectacular as we`re being told, with perhaps 120 million voters compared to the 106 million in 2000, this could mean a Democratic Senate if the younger first-time voters are coming out for Kerry and give him an easy win with coat-tails. Even so, the House seems to be safely in G.O.P. hands and the new President would have to accommodate them. It has not been pointed out, but this would be the first time in American history that a first-term Democratic president would come into office with a Republican Congress. The closest was Harry Truman, who at least had a one-year running start as President with a Democratic Congress before having to live with the Republican 80th Congress elected in 1946. Ronald Reagan faced a Democratic House when he was first elected in 1980 and Bill Clinton had to live with a G.O.P. Congress for the last six years of his presidency. But this would be a brand new experience for President Kerry.

The chief reason I`ve decided to vote for Kerry while voting Republican on the rest of the ticket is because in a divided government, Kerry would have the balance of power on foreign policy and national security and the Congress would have the balance of power on domestic affairs, especially tax policy. We will not have to wait for history to pass judgment on the President`s performance in foreign policy. It is patently obvious that his war in Iraq was a blunder of catastrophic proportions - and that he has no more ability today than he had in 2000 to figure out how to make a course correction. On economic policy, Mr. Bush has not been much better, but at least he had a Republican Congress steeped in supply-side fiscal policies to maneuver the 2003 cuts in capital taxation into place. In other words, when it comes to the twin goals of peace and prosperity, a Kerry presidency with a G.O.P. Congress would be the best of all outcomes, with the President assigned "peace" and the Congress assigned "prosperity."

The chief reason this election is so critical and why the electorate may see it as a watershed is that it is the first since the end of the Cold War through which the American people have to decide upon the role the rest of the world will play in the management of global affairs. These issues did not arise in 1992, 1996 or 2000 because the neo-con intellectuals who devised the Project for a New American Century (PNAC) did not quite have the leverage in either party to sell regime change in Iraq. With the help of Dick Cheney and Donald Rumsfeld, they sold Mr. Bush. In the process of nailing down a final decision for war, they had to persuade him to ignore the counsel of the rest of the world - the United Nations Security Council in particular - and go it alone with a "pre-emptive war."

Whatever else one might say of John F. Kerry`s history, in Vietnam or in his years in the Senate, he is "an internationalist," not an imperialist in the PNAC mode that would always put America`s best-fist forward in policing the world. What would this mean in Iraq or "the war on terror"? It would mean that Kerry would first consult his foreign-policy team - a deep bench that includes Jimmy Carter`s former national security advisor Zbigniew Brzezinski, Clinton`s U.N. Ambassador Richard Holbrooke, and Senator Joseph Biden, the ranking Democrat on the Foreign Relations Committee. They would urge him to seek the counsel of the main heads of state on what to do in Iraq. He would get lots of advice as a result, not all of it uniform, but the process would lead to an Iraq "solution," and perhaps a solution to the wider problem in the Middle East between Israelis and Arabs.

It is no secret that almost every head of state on the planet is now rooting for a Kerry victory tomorrow, precisely because it would mean a resuscitation of the United Nations - an institution derided by conservatives and neo-cons for decades as a "debating society." I`m a U.N. enthusiast because I believe it helped keep the Cold War "cold." In this new Unipolar World it is the only possible venue to legitimately extend the global interests of the U.S. in a way that maintains the support of global public opinion. When we don`t lead properly, the rest of the world will find ways to make our lives miserable.

President Kerry should certainly not kick off his term by asking for military and economic assistance. He would not get it unless he first prepared the political ground. He will have to find a way to persuade the insurgents in Iraq - including those many thousands of Islamic militants from other countries who are gaining strength in Iraq - that there will be a new deal. It would mean dissolution of the interim government of Iyad Allawi, which is universally viewed in Iraq as a puppet government of the U.S., and a fresh start toward elections under the supervision of genuine Iraqi nationalists, not the exile community. This will be a tough nut to crack, but it suddenly becomes possible when the rest of the world becomes involved in thinking of ways to crack it. Kerry pledges to send another 40,000 troops to Iraq to keep the peace, but he will make much more headway if he would suggest that the administration`s plans to "whack" the insurgents in Falluja be put on hold. I`d hoped Allawi might be okay when he was installed July 1, but as soon as he asked for U.S. jets to bomb Falluja neighborhoods, it was obvious that the Iraqi people could never accept him. Why President Bush would think so is, to me, certain evidence of his political haplessness in foreign affairs.

A President Kerry might seem equally incompetent on domestic affairs, a Massachusetts tax-and-spend liberal who proposes megabuck social programs that he will finance by raising tax rates on capital for the most productive Americans. His support of the Kyoto global warming treaty does not help, nor does his insistence that he will NEVER consider G.O.P. proposals for Social Security and Medicare reforms. As solid as is his bench on foreign affairs, so too is the squishiness of the team advising him on economic policy. How does this play out?

President Kerry would have two options, and only two. He could decide to press the agenda he was been carrying for the last year, through the primaries and general election. He could announce to Speaker Hastert and Senate Majority Leader Frist that he will present his own budget and a raft of legislative proposals dealing with taxes and spending. The only point of moving in this direction would be to blame the Congress for inaction, the way Truman did in his dealings with the 80th Congress, and wind up with more gridlock. The other option would be to accept the concept of divided government and the inherent powers of the House, especially on tax policy, and ask Chairman Bill Thomas of House Ways&Means on his opinion on how the government should proceed. It doesn`t hurt to ask, and in this uncharted terrain for a Democratic President, it seems the most likely way to proceed.

It cannot have escaped Kerry`s notice that President Bush has been making more of fundamental tax reform as he has campaigned in these closing weeks. This is an enormously popular idea among all Americans, but one they discount because they have heard it so many times in so many election seasons, only to see the tax codes become more complex, not less. My belief has always been that the only chance for basic reform is with a President and Congress of different parties. I`d hoped it could be approached in the Clinton administration, with a G.O.P. Congress, but the issue never came up. Now, though, it is on the table, with Speaker Hastert up front on reform and the chairman of the key House and Senate committees ready to go to work. We might hope Kerry will propose a Treasury Secretary who is astute as John F. Kennedy`s pick in 1960, Wall Street`s Douglas Dillon. He`ll at the very least need someone at Treasury who is willing to work with Rep. Thomas, who would be the most important Republican in Congress in a Kerry administration.

What about the stock market in a Kerry administration? There are predictions today that a Bush win would lift stocks by 1% and a Kerry win would sink them by 1%. Perhaps, but I think at the end of four years, the major equity indices would all be higher under Kerry than they would be in a second Bush administration. Diplomacy is much, much cheaper than war.