Bush calls it “background noise,” but it’s a lot louder than that. Potential criminal charges in the CIA-leak case, a Supreme Court nomination gone awry, hurricane relief over-spending, and investigations of the Republican leaders of the House and Senate all threaten to derail both the president’s political standing and his policy agenda. Not even the successful Supreme Court confirmation of John Roberts and the strong Iraqi vote to ratify a freedom-and-democracy based constitution have been enough to take the heat off Bush.
A sagging stock market knows that all’s not right in Washington. Even worse, it knows that the president’s once solid economic-policy vision is drifting off-course.
A significant congressional debate is now brewing over taxes and spending. House Republicans such as Mike Pence, Jeff Flake, and Marsha Blackburn are putting together an expanded budget package for mandatory spending cuts and a 3 percent across-the-board discretionary sequester that could net $600 billion in 10-year savings estimates. Meanwhile, over in the Senate, Republican Tom Coburn valiantly tried to halt the pork-barrel funding of Alaska’s “bridge to nowhere.” These are important developments, but the president and his top economic managers seem to be offering no encouragement.
For instance, Josh Bolton, the director of the Office of Management and Budget, has said nothing publicly about the necessary renewal of spending restraint. Only a month ago, he promised to deliver, in a few weeks time, a new list of White House-sponsored budget cuts and perhaps even a rescission package. But the period elapsed without any new ideas coming out of the administration.
This silence from the top is deafening.
When a recent CNBC poll asked which party was worse on pork-barrel spending, Republicans earned profligacy honors by a margin of 14 points -- 57 percent to 43 percent. This result shows that the investor class may understand politics better than the professionals in the West Wing -- they know that in today’s setting, pro-growth tax-cut extensions on capital gains and dividends will never make it through without a strong budget-cutting package. If the investor class deserts the GOP in next year’s midterm elections, Republicans will be crushed and the Congress could change hands.