He is melding the war in Iraq with the war to win tax relief on stock dividends. It is a shameless exploitation of a military victory with the goal of intimidating Republican holdouts on Capitol Hill. Just as Bush crushed Democrats in last year’s congressional elections with appeals to patriotism, he is now turning the big guns on his own party.
Two moderate Republican senators, Ohio’s George Voinovich and Maine’s Olympia Snowe, are under intense pressure to renege on their pledge to hold Bush’s tax cut at $350 billion. The conservative Club for Growth is running an ad in Ohio with a photo of Voinovich next to a French flag. The group’s press release calls Voinovich a “Franco Republican.” The same ad is slated for Maine with Snowe pictured alongside the French flag. A narrator equates the senators’ opposition to the full Bush tax cut with French opposition to the Iraq invasion.
Never mind the chaos that reigns in Baghdad–the hospitals overflowing with civilian casualties and stripped bare of supplies, the young boy with both arms blown off, the antiquities raided from the national museum–Bush is strutting the country with a triumphalism that would make Dwight Eisenhower blush. What even some Republicans in private find offensive about his push for tax cuts is that a war president’s first priority should be national security, which starts with paying for the war and its messy aftermath. A dividend tax cut helps very few and has no stimulative effect on the sluggish economy. “It’s giving away goodies to people who have already been rewarded,” says a top staffer to a key Republican senator.
Bush will play this out hard. He only needs two votes, and he has more than a month to get them. It’s a better than even bet that he will succeed. Stephen Moore of the Club for Growth says it will take a “huge lobbying effort” by Bush, but he’s convinced Republicans will come around “not only for the good of the economy, but for the good of the party and the ability of the president to get reelected. This has been a blow to his prestige.” On the very day U.S. troops took Baghdad, Bush bowed to political reality by downsizing his original $727 billion tax-cut proposal to $550 billion. It is still a hefty sum for an economy weighted down by mounting deficits and war costs but enough of a compromise to wonder whether Bush can translate his Iraq victory into legislative pay dirt. If it’s $550 billion, there will be room for at least a partial dividend tax cut; at the $350 billion favored by Senate moderates, Wall Street gets shut out.
The president’s claim that the dividend tax cut would benefit most taxpayers goes largely unchallenged. Seventy percent of taxpayers would receive no benefit at all according to the IRS. By contrast, the three top executives at each of the Fortune 100 companies would gain an average of $400,000 a year. Bush trades on the trust he enjoys with voters, which makes him a formidable campaigner. He gets credit for being plainspoken and a truth teller even when he falsely portrays his dividend tax cut as a jobs program.
Bush moved seamlessly to open a new front in his wartime presidency. Even Republicans wary of invading Iraq say that now the war’s over, it’s time to exploit the victory. Perhaps all the chest-humping will drown out cries of suffering Iraqis and the turmoil of creating a government from factions that hate one another as much as they despise Saddam Hussein. The Republican message is simple: Bush is great, and let’s cut taxes. This administration is the most disciplined ever to operate in the modern media world. They repeat their message over and over, and the cable-news cameras transmit the images and the words unfiltered from Doha and the Pentagon and the White House. The endless circle of briefings broadcast to the country gives the administration an unmatched megaphone. If we had state-run television, would it be any different? The ultimate test is whether these tax cuts, whatever the final figure, have any impact on the economy. Unemployment claims have hit 400,000 a week for the last six weeks. Eight million Americans are now out of work; many more have given up and are no longer included in the government count. On the economic front, Bush has a weak case, and his Republican opponents are so far standing their ground. Cleveland’s Plain Dealer newspaper called Voinovich and Snowe “a pair of Republican heroes.” Bush will get a temporary boost from a legislative victory, but to avoid the fate of his father–winning the war and losing the economy–he’ll need results.
