Saturday | July 13, 2002
The bad news presidency
The last few months have offered nothing but a steady stream of bad news, and no end to the negativity is in sight. Friday was no different.
For starters, the White House is conceding a $165 billion deficit. The White House budget chief claims "no one saw this coming." But of course, everyone did see this coming. The economy was slowing, and it logically followed that tax revenues would drop. But Bush and congressional Republicans argued that the cure-all was a massive tax cut. In fact, early last year, when selling his tax cut proposal Bush argued that:
An immediate tax cut would give the economy a timely second wind.So what happened? Not only did we have no 'second wind', but we're back to massive deficits. Of course, the White House avoids mentioning tax cuts when listing factors for the massive deficit.
But perhaps the most interesting aspect about the deficit announcement is the war it unleashed between Congress and the White House, each blaming the other side for the deficits. Mitchell Daniels, the WH budget director, blamed Congress for lacking fiscal discipline. Both parties unleashed on Daniels:
In a rare personal attack from the Senate floor, Appropriations Committee Chairman Robert C. Byrd (D-W.Va.) lambasted Daniels by name, likening him to a "little Caesar" and complaining that the appropriations process was being "maimed by someone who was not elected by the people of this country."Democrats are predictably (and justifiably) turning the deficit into a campaign issue. Congressional Republicans, already feeling vulnerable heading into November, don't want Bush to place the burden of blame on their shoulders.
And Republicans have much to sweat, considering the current economic and scandal environment. The Dow ended its worst week since September, losing 7.4 percent of its value. The markets were hammered by the near-daily corporate scandals, loss of confidence in the markets by investors, loss of confidence in Bush's ability to push needed reforms, loss of consumer confidence, and the new deficit numbers. The consumer confidence numbers are especially worrying. Consumer spending and the home market have collectively kept the economy afloat. Indications are that the home market is already softening. If consumer spending eases as well, it could wreak havoc on the economy.Posted July 13, 2002 10:01 AM | Comments (1)