The Magazine

The Bush Paradox

From the July 4 / July 11, 2005 issue: Why do his fortunes lag as the economy improves?

Jul 4, 2005, Vol. 10, No. 40 • By CESAR CONDA and JEFFREY BELL
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THREE YEARS AGO, IN the 2002 election cycle, the economy was sluggish, struggling to emerge from the recession and the dislocations of 9/11. According to most polls, President Bush received solid ratings on his handling of the economy. Today, GDP growth has firmed at 4 percent a year, and several million new jobs have been created since the economy bottomed in the first Bush term. The inflation rate remains low, as have long-term interest rates, including home mortgage rates. President Bush has unfavorable ratings on his handling of the economy, and the trend of recent polls has been down.

Whatever happened to the old rules? Has a strong and improving economy become a political negative for sitting presidents?

Part of the anomaly undoubtedly relates to the politics of wartime. The president was highly rated for his conduct of the war on terrorism in 2002, and some of that capital appeared to spill over onto his economic rating. By the same token, the spike in suicide bombings in Iraq in the last few months is no doubt casting a pall on voters' ratings of the president's performance on issues seemingly unrelated to the war. The lesson, if there is one: A wartime government is well advised either to conduct a visibly successful war effort, or at least to be holding its own in the political debate over why progress has slowed or gone into reverse.

The president's failure to reap political benefits from a strong economy may stem from aspects of the domestic debate as well. It seems implausible that voters, tens of millions of whom have refinanced their homes and improved their balance sheets, are utterly oblivious to recent economic gains. It is interesting that one of the recent national polls found voters' view of the strength of the economy going up even while the president's rating on economic issues has continued to slide.

In the president's first four years, it was often the Democrats who were baffled by this sort of conundrum. That is, George W. Bush seemed consistently to overperform politically. To Democrats, his political strength was greater than the facts of the issues--the war, the economy, domestic issues like health care, values issues like gay rights and stem-cell research--seemed to warrant. Today, particularly on the economy, he appears weaker than the objective facts would seem to warrant. What has changed?

Not the ups and downs of war. The failure to find weapons of mass destruction and the retreat from Falluja were, if anything, lower lows for Bush and his administration than the current wave of suicide bombings. There are Democratic strategists still in a state of shock that Bush was able to win the election in the face of such stinging setbacks in the war.

Not polarization. The hallmark of national politics since 2000 has been intense partisanship and ideological strife in a closely divided nation. So far in the second term, this shows no sign of changing.

In fact, to many Republicans the continuation of a high degree of polarization has come as something of a surprise. In the elections of 2002 and 2004, it was Bush and the Republicans who seemed adept at riding the wave of polarization. Both these elections were brutal, closely contested, and in doubt until the very end. Yet not only did Bush defeat John Kerry, but Republicans gained House and Senate seats in both 2002 and 2004.

Democratic attrition was particularly striking in the Senate. From an edge of 50-49-1 following the 2001 defection of James Jeffords, Democrats found themselves at 44-55-l in 2005. Under Tom Daschle the Senate had become the focus of bitter-end obstruction of the Bush agenda, on issues ranging from judges to energy to the faith-based initiative. With the Democratic losses and Daschle's own defeat in South Dakota, many Republicans assumed that Senate Democrats would begin to scale back their confrontational stance toward Bush.

Instead, Democratic Senate leaders have widened their use of the filibuster from Bush judicial nominees to U.N. ambassador-designate John Bolton, and may even filibuster the president's first appointment to the Supreme Court. On a series of second-tier issues like bankruptcy reform and class-action lawsuits, increased Republican Senate strength has helped carry the day. But the significance of these Bush victories is small in comparison with the impact of Senate-centered polarization on Bush's high-profile second-term agenda on the economy and Social Security.

In the first term, Bush won his biggest domestic victories with the tax-cut bills of 2001 and 2003. Both of these bills cleared the Senate under budget rules that prohibit filibusters. The 2003 tax cut, which moved up the effective date of the 2001 tax cuts and achieved a bold, unexpectedly large reduction in the double taxation of dividends, cleared its major Senate hurdle on a tie vote.