By Richard S. Dunham The President faces two serious challenges with the soft economy. Job No. 1 is to increase economic growth, business investment, and consumer confidence while reducing unemployment and fending off inflation. But the more serious risk to Bush is political. Public confidence in him as steward of the nation's economy is at its lowest point in his Presidency -- lower than it was after he assumed office amid controversy, lower than it was in the summer of 2001 before the events of September 11 resulted in a spike in his popularity.
Bush's father lost the Presidency a decade ago because the public didn't think he was sufficiently concerned about economic difficulties at home. Never mind that the economy was well on its way to recovery in November, 1992. It didn't feel that way to voters. And they chucked the hero of the Persian Gulf War out of office.
Bush fils is determined not to make that same mistake. His symbolic sacking of Treasury Secretary Paul H. O'Neill and chief economic adviser Lawrence B. Lindsey sent an unmistakable signal that he isn't satisfied with a tepid recovery. Now he's putting together an aggressive legislative package that will include hundreds of billions of dollars in tax cuts and assistance to hard-hit workers and investors.
SLIPPING APPROVAL. From the standpoint of "political spin," Bush is sure to score points in the next few months. He needs economic results, too, and long before the 2004 election. The sooner, the better for the Bush team and the Republicans.
Despite Bush's overall popularity, his party's sweep of Congress, and its gains in state legislatures, the President is not a shoo-in for reelection. Political experts and even some Bush advisers tell BusinessWeek that a sour economy is the greatest threat to a second term. "What could derail the Bush Express is the economy slipping into another recession," argues Stephen Moore, president of the Club for Growth, a group of economic supply-siders.
It's easy to see why the President was worried enough to shake up his team. A Dec. 3-4 Fox News/Opinion Dynamics Poll found that 86% of Americans were concerned about the economy, and 65% felt it was still in recession, something the President firmly denies. And public approval of Bush's handling of the economy has slipped below 50% -- 47% in the Fox poll, and 49% in a similar Dec. 9-10 Gallup Poll. Disapproval of Bush's domestic policies has nearly doubled since he took office.
UNFRIENDLY MAP. More problematic for the President are some of the pockets of dissent. His lowest economic-approval ratings are in the South Atlantic region that includes the pivotal state of Florida, where just 29% of adults think he's steering the nation in the right direction. And just 44% of Westerners and Northeasterners approve -- ratings that should alarm any President before an election. Only in Bush's home base in the South Central states, including Texas and Oklahoma, is there widespread support (59%) for his economic stewardship.
The polling shows four serious demographic warning signs for Bush:
Just 37% of voters over age 70 believe he's handling the economy well. Retirees are among the most reliable voters.
Only 47% of those earning between $50,000 and $75,000 are fans, far lower than it should be for this key swing group. And a surprisingly small 51% of those earning more than $100,000 give Bush passing marks.
A meager 38% of Independents favor Bush's economic management.
And a stunning 93% of fifty-something Americans say they are concerned about the country's financial condition. These so-called "near retirees" have seen their stock portfolios battered in recent years and want the President to help turn the stock market around. Not surprisingly, just 45% approve of Bush's economic performance.
TIME TO ACT. Of course, the war on terrorism, and possible war with Iraq, could overshadow domestic issues in the days ahead. And Democrats still must convince anxious voters that they have both a candidate and a plan that would be an improvement over Bushonomics. In the recent congressional campaign, the party of the donkey failed to articulate a positive, coherent economic agenda. "You can't simply say, 'the economy is bad, so throw the bums out,'" says Robert L. Borosage, co-director of the liberal Campaign for America's Future. "You have to be clear where you stand."
Despite the Democrats' 2002 track record, however, Republicans can't count on them to self-destruct in '04. And Bush seems to realize it's time for action. "Parts of America are experiencing persistent unemployment," he said on Dec. 9 as he introduced his Treasury Secretary-designate John W. Snow. "[And] investor confidence needs to be strengthened in practical ways."
Because of the GOP sweep of 2002, Bush is likely to get his economic wish list from Congress nearly intact. It's his economy now. If his prescription works, he's likely to be rewarded with a second term. But if the patient still feels the economic sniffles in another year, the '04 contest could become a carbon copy of the photo finish of two years ago. Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views every Monday in Washington Watch, only on BusinessWeek Online