A Bush Presidency, A Democratic Congress? Jude Wanniski October 7, 1999

At his Manhattan Institute speech on Tuesday, Texas Governor George W. Bush stated in the clearest terms yet that he is not interested in national wealth creation, but in a compassionate government that taxes the rich to help the poor. This sort of silver-spoon noblesse oblige used to be known as Rockefeller Republicanism, and it surely is what we would get in a Bush presidency. In criticizing the Republican leadership of Congress for taking positions that are out of tune with this philosophy of governance, in style, if not in substance, young Bush is proclaiming himself the leader of the "Mommy wing" of the Daddy Party. We had been of the belief that he was his father's son, the George Bush who was kinder and gentler than Ronald Reagan. We now see that he is at heart his mother's boy, with a political and social outlook closer to that of Barbara Bush. This helps explain why the GOP Establishment rushed to press $60 million into his hands, as a reaction to the public's displeasure with the leadership of former House Speaker Newt Gingrich.

We saw this last March, when Bush named former Fed Governor Larry Lindsey as his chief economic advisor. An ersatz supply-sider with a Harvard Ph.D., Lindsey made his mark at the Fed with an aggressive program to force banks to lend money to minorities to get capital into their hands, even though the policy produces net negative returns on investment. The growth solution recommends elimination of the capital gains tax, which makes capital plentiful, while allowing the market to get it into all the minority hands that might produce positive returns. In his Washington Times interview two weeks ago, Bush casually let fly with the remark that he would use the budget surplus to fund the entitlement programs, and if there was any money left over, he would cut taxes, which was precisely the GOP approach to governance prior to the Reagan administration. Remember Gingrich describing Bob Dole as the "tax collector of the welfare state." Indeed, "Mr. Conservative," Barry Goldwater, in 1964 opposed John F. Kennedy's supply-side tax cuts on the grounds that the budget was not in balance.

Congressional Republicans have brought on their own miseries by announcing soon after they won control of Congress in 1994 that they would govern without the dynamic budget scoring that underpinned the Kennedy and the Reagan tax cuts. In a static, zero-sum model, any tax cut has to be "paid for" with savings on the spending side. Gingrich would still be around if he had embraced dynamic scoring in 1994. Instead, he wound up twice shutting down the government, seemingly to cut taxes for the rich with money from the school-lunch program and Medicare. But wait. Don't we now have trillion-dollar budget surpluses as far as the eye can see? Can't a tiny bit of that go to tax cuts? Not if Republican leaders allow themselves to be lured by President Bill Clinton into putting those trillion-dollar surpluses off limits, on the grounds they are related to Social Security and Medicare. Forced to scrape for nickels and dimes, GOP budgeteers two weeks ago tried to juggle the "Earned Income Tax Credit" to the working poor in a way that would pay the funds out in monthly installments instead of an annual lump sum. Democrats screamed as if widows and orphans would be thrown into the snow. And here comes George W. Bush, denouncing the congressional Republicans for "balancing the budget on the backs of the poor."

Naturally, the NYTimes Wednesday applauded the Texas Rockefeller for his superior wisdom, noting that he had borrowed a page from the Dick Morris "triangulation" book. In essence, Clinton moved further and further toward his right in that zero-sum game, pushing the GOP toward the extreme. When the GOP could not figure out how to defeat that strategy, Clinton then ran for re-election on a promise to save the nation from the heartless Republicans. The poor voters in 1996 had little choice but to divide the government again, giving Congress back to the Republicans and the White House back to Clinton. As I wrote in my book The Last Race of the 20th Century this year, Gingrich assumed Clinton's re-election and played simply for control of Congress. This is the game now being played, in reverse. Congressional Republicans now are realizing the price to be paid for putting George W. into the Oval Office will be a Democratic Congress, as the GOP has had the Congress for six years and has shown itself unworthy of governance.

History rarely is that symmetrical, though. This is why I think former New Jersey Senator Bill Bradley and Republican Pat Buchanan will upset the Establishment game. The Democratic voters will choose Bradley over the Establishment choice, Vice President Al Gore. (David Letterman this week noted that Gore had his annual physical recently and his doctors decided he died of natural causes.) Bradley, though he now seldom stumps as the "growth Democrat" he was in the 1980s, is anti-establishment, an internationalist, and a tax reformer, and would make a much better President than Bush, in my opinion. Where the polls show Bush would beat Bradley one-on-one, I think Bradley would easily win a three-way race with Pat Buchanan running as the Reform Party candidate. Conservative Republicans, upset with George W. Rockefeller, would come out to vote for Pat and return a GOP Congress, give him perhaps 20% of the vote, and produce another four years of divided government.

Buchanan called me Monday afternoon, having just read my book on the 1996 race, and we talked economics and politics. I told him I'd help him with advice, if he wished, as we have been on friendly terms for almost 30 years, and I totally reject arguments that he is anti-Semitic because he at times disagrees with the Jewish political consensus. His recent best-selling book on American foreign policy, A Republic, Not an Empire, has been cast as "pro-Hitler" by his most outrageous detractors in the Jewish community, but is nothing of the sort. It actually is a good starting point for a much-needed national discussion about our international responsibilities in the coming century. Its Middle East prescriptions are reasonable, actually shared with a serious fraction of the Israeli people. (Pat laughingly told me he gets no credit for being a lifelong Zionist.) Buchanan believes he could win a three-way race against Gore and Bush, and perhaps he could, but I doubt he could win in a three-way with Bradley and Bush without a significant makeover.

In my monthly client conference call yesterday, I noted that since Dan Quayle dropped out, I've been among several friends of Jack Kemp who have been urging him to come out of retirement and get back into the race. He may be the only man who could upset this Bradley-Bush-Buchanan scenario -- by running for both the GOP and the Reform Party nominations, which is what Quayle was planning to do before he ran out of money. Kemp decided not to get into the race because it seemed there was sufficient talent in the broad GOP field to permit him to segue into elder statesmanship, bowing to the wishes of his family, and making a handsome living on the speaking circuit. He now sees the political mess and political vacuum, publicly predicting that Bradley will win the Democratic nomination, inferring that he would be the likely winner in a three-way race with Buchanan and Bush. His greater concern is that the issues he thought would be addressed in the campaign have been ignored, which suggests whoever wins next year will face four more years of divided government and gridlock. Will he suit up again? A small chance, given the lateness of the hour. But it may be the only force with the potential of producing a Reform-minded Republican White House and Congress in 2000.