WHEN REPUBLICANS won the House and Senate in 1994, President Clinton was badly shaken. At a White House press conference, a reporter suggested Clinton might no longer be "relevant" as a leader. It took weeks for Clinton to recover his composure. It turned out, of course, that he was as relevant as ever as a national leader. Presidents always are.
If President Bush was shaken, he didn't show it. He waited only hours after Democrats had captured Congress last week to assert himself. And he instantly changed the media story from an Election Day repudiation of his presidency to his removal of Defense secretary Donald Rumsfeld. He followed that with a press conference at which he listed the issues where compromise might be reached with congressional Democrats. This was before he'd met with either Democratic leaders Nancy Pelosi or Harry Reid.
Bush is a lame duck, but only technically (he won't run again). He intends to be a very live duck in his final two years in the White House. When he talked to Henry Paulson, then the CEO of Goldman Sachs, last spring about becoming treasury secretary, he promised to push hard for a serious agenda no matter what the outcome of the midterm election. The result was bad for Bush, but he plans to keep his promise.
Is Bush suffering from delusions of grandeur? Not really. True, he'll have to make concessions, probably painful ones, on legislative initiatives. And his prospects for getting conservative judicial nominees through the Senate are slim. But as we learned from the Gingrich years, you can't govern from Capitol Hill. The president, even weakened as Bush is, remains the central figure in Washington.
Bush has an unmatched set of political tools. With strong Republican minorities in both houses, he has veto power. He never used it to cancel Republican bills, but he'll be less reluctant to kill Democratic bills. Bush is in charge of foreign policy, as we'll be visibly reminded next week when he travels to Vietnam and the following week when he goes to Latvia for the NATO summit. And he is the man with the megaphone. He can always command a national audience. Pelosi and Reid can't.
With Rumsfeld's resignation, Bush demonstrated his willingness to make major concessions. Rather than change the strategy in Iraq, he changed the strategist. This is not the first step in a disguised retreat from Iraq, Bush aides insist, nor does it represent a turnover of national security policy to the "realists," as opposed to an idealist like Bush, who ran foreign affairs under Bush's father. The president told Rumsfeld's successor, Bob Gates, the goal is still to create a stable democratic Iraq that can defend itself--in other words, victory.
Congressional Republicans wish Rumsfeld's departure had occurred three months earlier, and some Bush advisers agree it should have. Whether that would have reduced Republican losses is unknowable. What is clear, though, is that Bush recognized an unpopular war, without victory in sight, cannot be sustained for long. The election underscored that. Something had to give, and it was Rumsfeld.
After six states passed referendums to hike the minimum wage, Bush has to give on that too. It is an area where he and Democrats can "find common ground," Bush said at his postelection press conference. This means he and Democrats will negotiate a new national wage floor, set currently at $5.15 an hour--probably on Democratic terms. Bush has little leverage on this issue.
He has considerably more leverage on immigration reform since Republican restrictionists, the bane of Bush's drive for reform in 2006, took a bath in the election. In the national exit poll, voters favored, 57 to 38 percent, a path to citizenship for illegal immigrants in the United States. Bush and Democrats are in sync on earned citizenship. But Democrats, given their subservience to organized labor, are leery of a temporary worker program to import cheap foreign labor. Bush wants one, and Democrats will probably have to yield on this for "comprehensive"--Bush's word--reform to happen.
Compromise will be tougher, if not impossible, on other issues. The problem with reforming Social Security is that Democrats, at heart, are reactionary liberals and the president is a reformer. What there is of a Democratic plan is simply to raise the level of income subject to payroll taxation to roughly $150,000 from the current $94,200, a humongous tax increase. And Democrats are dead set against creating personal investment accounts.
Bush is the world champion of private accounts, and rightly so. They are the only hope for making Social Security solvent without imposing a crushing tax burden on America's most productive citizens. Bush hinted while campaigning for reform last year--with no help from his timorous Republican allies in Congress--that he'd accept a small tax hike. But even that would have to be accompanied by personal accounts. "If we do not have Republicans and Democrats at the table for entitlements, nothing is going to happen," Bush said. So nothing is.
Nor is anything meaningful likely to happen on energy. Democrats want energy independence without increasing domestic oil production, an impossibility for the foreseeable future. Bush relishes more domestic production.
On education, Democrats pay lip service to reform. But they're really reactionaries, beholden to the teachers' unions. And the unions loathe No Child Left Behind, the president's signature reform program, because it requires accountability on the part of teachers and local school officials. It may be gutted or fall by the wayside.
The person to watch on minimum wage and taxes and entitlements and trade is Paulson. He's been given an unusually long leash by Bush to negotiate with Democrats. Bush said he has "instructed" Paulson "to reach out to folks on the Hill to see if we can't at least get a dialogue started . . . [on] the unfunded liabilities inherent in these entitlement programs."
There's a wrinkle with Paulson. He isn't as tax-averse as Bush, White House officials, or most Republicans. He is believed to be receptive to a deficit-reduction deal, for instance, that would raise the top rate (now 35 percent) on individual income and/or the payroll tax cap, in return for spending restraint and entitlement reforms. But Paulson's job, under Bush's orders, is to make deals, and Bush will have to decide whether to ratify them. In his last years, Bush will be neither lame nor irrelevant.
Fred Barnes is executive editor of THE WEEKLY STANDARD.