A Long Winter for the GOP

With Harriet Miers added to a list of missteps, the result could easily be a worst-case scenario for Bush, Republicans -- and business

By Lee Walczak, Richard S. Dunham, and Eamon Javers

This is what Hell Week looks like for the Republican Party… and in this case, the fire-and-brimstone period could stretch far into the horizon, imperiling both a President's ability to govern and prospects for the GOP majority.

On Oct. 27, White House Counsel Harriet Miers abruptly ended her candidacy to fill a Supreme Court seat vacated by the retiring Sandra Day O'Connor, bowing to pressure from conservatives and Democrats alike. The White House is expected to move quickly to name a replacement -- if only to divert attention from other woes (see "A Short List for the High Court"). By Oct. 28, a grand jury looking into the outing of CIA operative Valerie Plame could hand down indictments that implicate top Bush aides, including über-strategist Karl Rove and I. Lewis Libby, a staffer for Vice-President Dick Cheney, in a coverup.

Still, the Miers affair was a rare instance in which almost everything that could go wrong with a nomination did, from George W. Bush's initial miscalculation that his base would back an undistinguished functionary to Mier's own disastrously unconvincing personal diplomacy on Capitol Hill, the latter in the form of folksy Texas-style "visits" that failed to win friends or influence people. Miers' withdrawal puts Bush, who has already fallen to 38% public approval in recent polls, in the greatest peril of his Presidency. And things could get worse.


  On Capitol Hill, the Republican majority is writhing in its own agony. Top House leader Tom DeLay of Texas has had to vacate his leadership post while a Texas prosecutor (a Democrat) investigates his role in a campaign fund-raising scandal. And Senate Majority Leader Bill Frist (R-Tenn.) is under Securities & Exchange Commission scrutiny over sales of HCA (HCA ) stock from his blind trust. Frist has stoutly denied wrongdoing in the matter. But in retrospect, it appears that the senator had more knowledge about his portfolio than many believed, since his holdings were in a qualified, vs. totally blind, trust.

Although it's a rare day in Washington when Democrats get to skewer Republicans over ethics (the Dems have long had their own problems with fast-fingered lawmakers), the perception that the GOP majority has somehow lost its bearings may be taking a toll.

Indeed, an NBC News/Wall Street Journal poll released Oct. 13 found that 48% of respondents said they want Democrats back in control of Congress, vs. 39% who favored Republicans. If this lead in the generic numbers continues and widens because of unhappiness over the Iraq war and high fuel prices, the In Party could get a drubbing in next year's midterm elections. (Most analysts don't currently think that the Democrats can win back either the House or Senate in 2006, but many sense that they could come close enough to clinch the deal in '08 if they manage to nominate a winning Presidential pick.)


  Put the GOP's troubles on both ends of Pennsylvania Avenue together, and you have the potential for a long stretch of political turmoil. Worse still for Bush is the growing suspicion that just a year after his reelection, he has lost his Presidential swagger and been rendered a lame duck.

A feisty, resourceful politician who has often been counted out by overconfident foes, Bush will fight back by launching into a period of hyperkinetic activity reminiscent of his barnstorming post-Hurricane Katrina phase. Splashy Presidential trips to the hinterlands, TV interviews, and speeches on "big reform" topics such as Social Security overhaul and tax revision will all be part of the comeback strategy.

But the White House's immediate challenge is bouncing back from the Miers fiasco, which is no easy task. No matter whom Bush taps to succeed her, he's in the unenviable position of looking weak. If he heeds right-wingers' calls to go with an ideological firebrand, the choice appears to be forced on him, and Democrats can easily unify in opposition. If he reacts angrily to Miers' rejection by opting for a pragmatist such as Attorney General Alberto Gonzales, Bush risks splintering his base after five years of assiduous party-building.


  Not only would conservatives go berserk over Gonzales, whom they consider soft on abortion and affirmative action, but any Miers-like claim of Executive privilege to withhold Gonzales' writings would infuriate right-wingers in search of judicial certitude. "If the [stated] reason for the Miers withdrawal was the impasse over internal, privileged White House documents, that would also be an issue with Gonzales," says a conservative activist close to the selection process. "That indicates to me that he can't be…the nominee."

Although no one knows how the President will react once he mutes his anger over the sting of rejection and begins to coolly sift his options, one thing is certain: Democrats smell blood and are now prepared to unleash the "nuclear option" if the White House lurches too far right in the court selection.

That means a filibuster on the Senate floor and a period of intense partisan warfare, a scenario that many business lobbyists have long dreaded. Why? Because what's left of Corporate America's legislative agenda, from gaining first-year expensing of capital equipment purchases, to further progress on tort reform, to a business-backed Bush plan to admit more immigrant "guest workers" into the U.S., could all become casualties of the crossfire. The current environment is "disturbing," says Frank Maisano, an energy lobbyist for Bracewell & Giuliani. "The Democrats are starting to circle like sharks."


  True, business was lukewarm over Bush's signature 2005 domestic objective, partial privatization of Social Security. And corporate leaders are deeply split over his next Big Idea, a tax reform plan that could create as many business losers as winners (see BW Online, 10/18/05, "An Either/Or Plan for Tax Reform") . But even in a highly polarized environment on Capitol Hill, K Street lobbyists were still able to move the ball for business, winning victories on incremental liability reform and energy legislation aimed at boosting domestic production.

What happens if the Democrats go nuclear over the Miers replacement and GOP ethics? Gridlock so intense that lobbyists will be hard put to see through all the smoking wreckage. It's not a scenario many triumphant business reps envisioned after Bush's narrow 2005 victory. But it's one they're definitely staring at now, while they mutter about the things that might have been.

Walczak is BusinessWeek's Washington bureau chief, Dunham is Washington Outlook editor, and Javers is a correspondent in the Washington bureau

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