President’s Signature Issue

The conventional wisdom was that President Bush would be strongest in the debate on foreign policy and weakest in the debate on domestic issues. But precisely the opposite turned out to be the case, and it shouldn’t have been that much of a surprise.The Iraq war, after all, has been a bumpy affair, to say the least. While the election in Afghanistan gave substance to the president’s argument that “freedom is on the march,” it has long been apparent that the Democratic nominee would be in a position to raise some heavy-duty questions about the White House’s management of the war on terror.And while polls seemed to show the president highly vulnerable on domestic issues, such as health care and jobs, this may have had more to do with lack of familiarity with the actual Kerry record than with disagreement about Mr. Bush’s policies. Mr. Bush effectively placed Senator Kerry on the defensive in the final debate with repeated references to Mr. Kerry’s opposition to tax cuts – not to mention his big-government approach to health care and his almost complete lack of any substantive legislative achievements in two decades in the Senate.Mr. Kerry tried to hammer back with his theme that the Bush tax cuts disproportionately benefited the wealthy and haven’t done much for the economy. And he again likened the Bush record to that of Herbert Hoover from 1928 to 1932.But this only showed the intellectual weakness – if not downright dishonesty – of the Kerry argument. Hoover’s big mistake, after all, was precisely that he raised taxes by a huge amount – first through a 50% increase in tariffs in 1930, then with an election-year income tax hike that raised the top rate on the wealthy to 63% from 25%. The first $10,000 of income was raised to 4% from 1%. The result of the first was an economic calamity of global dimensions; the second expanded a nasty recession into outright depression.Mr. Bush, by contrast, has been cutting tax rates as fast as he can – which, if fault can be found, may not have been fast enough. The most recent recipient of the Nobel Prize for Economics, Edward Prescott, who lives and teaches in Tempe, Ariz., where the third debate took place, recently offered the heretical notion that “tax rates were not cut enough” in 2001.And to those who claim that the Clinton tax increases of 1993 were responsible for the 1990s boom, Mr. Prescott offered more cold water. The Clinton tax increases actually depressed total output by 4% a year, he argues. America still isn’t living up to its economic potential because of the tax burden, he added.Like Clinton before his 1992 election, Mr. Kerry is promising to cut taxes on the middle class. But Mr. Bush noted that it wouldn’t be possible for Mr. Kerry to keep his pledge if he also keeps his promises to cut the budget deficit in half and expand health care and other programs by $1.2 trillion in coming years. When voters go to the polls on November 2, they are likely to be asking which of his promises Mr. Kerry is least likely to keep.If there was a real gap in the Bush performance, it was not how he looked or sounded. It was that he himself didn’t tell voters anything about his own tax plans for the future. That will make it difficult for him to claim much of a mandate for the tax simplification that he claims to want now. And with the job picture still less than robust, by some measures, it would have made sense to stress the need for even deeper rate cuts.Mr. Bush could also have made the point that the wealthy actually are paying just as big a share of the income tax burden as they were a decade ago. The top 1% of income earners pays 33% of the income tax; the top 20% bear 80% of the burden.But these certainly weren’t points that Mr. Kerry was going to make. And it may have been enough for Mr. Bush to drive home the point that he is on the side of economic growth rather than government growth. Style aside, Mr. Bush always had the advantage on domestic issues – because his signature issue, taxes, has always been more in sync with the bread-and-butter concerns of real-world voters.Mr.Bray is a Detroit News columnist.

President’s Signature Issue

President’s Signature Issue

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