Look to '06 for Bush's Agenda to Rebound

Posted: Jan 10, 2006 11:18 AM

WASHINGTON -- The White House is working this week on President Bush's 2006 legislative agenda, even though most of his major recommendations will be last year's leftovers.

That's because a divided Congress, marked by post-election bickering at its worst, couldn't agree on some of Bush's most ambitious proposals: Social Security and immigration reform, making his tax cuts permanent, extending the Patriot Act's anti-terrorist provisions for another four years, and minuscule five-year budget cuts to keep the deficit on a downward trajectory.

Congress did accomplish some important things last year, despite the political trench warfare among Senate Democrats, who used the filibuster to block votes they knew they could not win under majority rule.

The Central American Free Trade Agreement (CAFTA) gave the free-trade agenda a much-needed push. The confirmation of John Roberts to be Supreme Court chief justice moved the high court in a more conservative direction.

There were other preliminary votes that suggested majority support for Bush's remaining objectives, including an early Senate vote to drill for oil in the Arctic National Wildlife Refuge (which was blocked in the Senate's final days last month on parliamentary grounds), and House approval of Bush's capital gains and dividend tax cuts.

But it was a dismal legislative year overall that earned poor marks from voters, marred by numerous distractions: House Majority Leader Tom DeLay's presumably temporary resignation under trumped-up charges of campaign money-laundering; the White House's focus on the CIA leak investigation that turned out to be much less than it appeared; the catastrophic damage inflicted by Hurricane Katrina that led to gleeful finger-pointing by Democrats; and a furious Democratic offensive on the Iraq War against a White House that for months seemed to have lost its zest for political battle.

OK, that was last year and this is now. The White House has certainly regained the offensive on Iraq, as witness Bush's 10-point surge in his job approval polls. The economy is strong, with a well-timed Conference Board survey last week showing a sharp increase in consumer confidence going into the new year.

Gas prices have fallen. So have home prices, as the overheated housing boom cools somewhat. Even mortgage rates, defying all predictions, have declined in recent weeks, which is good news for homebuyers.

Now Bush has a chance to take advantage of this sunny window of opportunity to make the case for enacting the administration's unfinished agenda and maybe win one or two new initiatives still on the drafting table.

Iraq and the war on terrorism remain at the top of his agenda and will loom over the year's events. Visible success in Iraq will strengthen his hand in Congress and his party's credibility on national security, too, as they prepare for the midterm elections.

Certainly Social Security reform, which dominated last year's domestic debate, is going nowhere for now, but that clears the deck for other doable legislation.

Making the tax cuts permanent is paramount. It is the signature economic issue in Bush's presidency, it's responsible for the 4 percent growth we're experiencing, and if the lowered rates are allowed to expire at the end of this decade, just about everyone's taxes will go up.

Republicans are virtually united on this issue and there are a number of Democrats, especially in the Senate, who do not want to vote for higher taxes in an election year.

Broader tax reform proposed by last year's presidential commission, which is being redrafted at the U.S. Treasury, is a far bigger challenge. But Bush loses nothing by putting it on his agenda, identifying his party with income tax simplification and pro-growth rate reductions. It is a populist issue to run on and use against the Democrats who define tax reform as raising the rates.

Finally, getting control of spending and chipping away at the deficit is still an important issue to many Americans, particularly in the GOP's base. The $39 billion House-passed budget-cutting bill isn't going to pass the Senate in its present form, but the votes are there for gradual year-by-year reductions in the rate of spending increases. Bush needs to make this a bigger issue than he has in the past.

Meanwhile, two sea-change reforms will take place this year no matter what happens to Bush's agenda.

First, the Medicare prescription benefits program gets going in earnest, with a major government effort to make the available choices clearer to seniors. That's going to have a very positive impact on one of the nation's pivotal voting blocs that could give the GOP the edge in November.

Second, Supreme Court nominee Samuel A. Alito Jr., will be confirmed, moving the court further to the right, just as Bush planned to do. If he accomplishes little else this year, that will stand as a ground-breaking change in the high court's makeup for many years to come.