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Press Release

    Can Bush Get His Fiscally-Conservative Groove Back?

    09/18/2007

    President Bush has never been known for small-government absolutism.  His tax cuts have been a real economic success, but the President has thus far refused to confront runaway Congressional spending.  Indeed, the Bush Administration’s hands are hardly clean on this front, and a good deal of government bloat can be traced back to ill-conceived expansions under No Child Left Behind and Medicare Part D.  

    By ignoring Reagan’s legacy and his party’s economic principles, Bush has alienated not just fiscal conservatives, but much of the populace. National polls now show that a majority of Americans now identify the Democratic Party as the party of fiscal discipline. One need look no further than the substantial losses taken by Republicans in the 2006 election to see evidence of public consternation with the party’s lack of budgetary restraint.

    But a string of recent statements indicate that Bush might be nudging the Republican Party back to its small-government roots. Whether by midnight conversion or the realities of a Democrat-controlled Congress, Bush is beginning to sound like the fiscal conservative many in his party always hoped he would be. It might just be that Bush’s last 16 months in office bring out his inner economic conservative after all.

    We’ll know soon enough. The first big test begins this month, and it will be over spending priorities in appropriations bills. Congress and the White House look poised to duke it out over discretionary spending. As with any good fight, the stakes are high: A budget or continuing resolution must be passed before September 30th, or the government could face shutdowns. The president submitted his budget to Congress months ago, but so far, Capitol legislators have sent nothing back to his desk.   

    But the House, led by Nancy Pelosi, has passed all 12 of its bills, and they exceed the president’s spending requests by a whopping $23 billion. Democratic leaders in the House have tried to play down the difference, with Nancy Pelosi laughably labeling her party’s requests “fiscally responsible.” Bush, however, isn’t hearing it. He’s threatened to veto all eight appropriations bills that exceed his requests. Not bad for a guy who’s embraced so many spending bills with open arms.

    The President, it seems, is beginning to understand what small-government conservatives have been saying all along: Budgeting is about setting priorities. And indeed, when questioned about infrastructure spending in the wake of the Minneapolis bridge collapse, the President resisted calls for additional spending. He recently told Neil Cavuto that “if rebuilding bridges is that big a priority, then we ought to prioritize that in [money] we've already budgeted, as opposed to helping individual congressmen or senators realize pet projects in their districts.”

    Nor did Bush jump on the bailout bandwagon during the recent slide in the sub-prime mortgage market. When asked about federal intervention in the mortgage industry, Bush replied, “I’m for letting the market work.” While Bush called for some changes to federal housing welfare programs recently, he argued against broader action, saying that “It's not the government's job to bail out speculators or those who made the decision to buy a home they knew they could never afford.”  

    On health care, Bush has pushed back on Democratic attempts to force taxpayers to foot the bill for an even greater share of the nation’s medical care.  He recently caused a stir by proposing rules that would bar states from turning S-CHIP, a program which provides health-insurance to low-income children, into a broad, middle-class entitlement that would dole out generous health benefits to children in families earning up to $80,000.  Bush, much to the chagrin of a number of Democrats, wants the money to actually go to low-income children. 

    He’s also threatened to veto the Democrats’ plan to expand the program by as much as $50 billion.  It’s hardly a secret that liberals want to socialize the nation’s medical coverage.  Recently, their strategy has been to do it incrementally, slowly adding to the pool covered by government programs.  But while the Left pushes for ever-more-costly medical programs, the Bush administration is talking plainly about the coming entitlement crisis.  A recent fact sheet released by the White House highlighted the idea that “ the Democratic majority has no plan to deal with the unchecked growth in entitlement spending.”

    Fiscal conservatives should also find solace in President Bush’s statements supporting tax code simplification and lowering US corporate tax rates. Noting that the US has the second highest corporate tax rate in the OECD, Bush bluntly stated that “our tax structure makes us less competitive.”

    Talking heads are already calling Bush a lame duck president, but he has a significant opportunity to lay the foundation for the next conservative majority by contrasting the stark differences between lumbering, ineffective government solutions and the sleek efficiencies of the market.  By standing firm, President Bush can help Republicans rebuild their fiscal-conservative brand while Democrats sink into the morass of burdensome taxes and cumbersome regulations. 

    It’s true, of course, that not all the signs are promising.  Bush is expected to push to continue No Child Left Behind, and he recently passed the America COMPETES Act despite his own admittance that it provides for “excessive authorization…of government” by creating “ over 30 new programs that are mostly duplicative or counterproductive.”  But the good news is that, on the nation’s finances, President Bush seems to have learned to talk the talk. One hopes that, with time, and some encouragement from fiscally conservative supporters, he’ll also learn to walk the walk.