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President Builds New Programs Heading to a Second Honeymoon

June 18, 1989|David R. Gergen | David R. Gergen, White House communications director during Ronald Reagan's first term, is editor-at-large for U.S. News & World Report

WASHINGTON — It's time for George Bush to revive an old romance. Nineteen years ago, after he lost a Senate race in Texas, Bush was looking for work. Come to the White House as congressional liaison, suggested Richard M. Nixon, who had encouraged the race. No thanks, said Bush, uninterested in a staff job. Well, how about U.S. ambassador to the United Nations? OK, said Bush, and he launched an international career that put him on the road to the presidency.

But what did Bush himself want in those days? Sources from the Nixon White House say that he had a different path in mind, far from diplomacy and maybe even politics. His first choice was a top post at the Treasury Department, drawing on his days as an oilman and as member of the House Ways and Means Committee. Bush hoped that Nixon would eventually make him Treasury secretary.

Though he hasn't been a close student of the economy since then, Bush could serve the country well if he returned to his old interest in economic affairs. By fall, he should unveil a plan for economic renewal. For both Bush and the economy, this is an ideal time to strike.

In the last four weeks, Bush has vaulted into his strongest political position since taking office. His arms proposal in Europe seemed to liberate him from a cautious past. Suddenly he gained his bearings--with his handling of the China crisis, a clean air proposal, blockage of a minimum wage proposal and House passage of most of his savings-and-loan bailout. An early June Gallup poll showed his popularity climbing 14 points to 70%, highest of the year. And that was before his call for cleaner air--a sure winner. After a dangerously slow start, Bush may now begin a second honeymoon.

He has seized the high ground just as Congress is falling off the charts in public esteem. While the Democrats have now elected stronger leaders in the House, they are likely to be far more conciliatory than anyone imagined six months ago. For the first time since the Vietnam War, the flow of power away from the White House to the Congress may end. Ronald Reagan was more formidable than Bush in his first year, but he could never reverse the tide. Bush might--if he sets a more ambitious agenda for the nation.

With the tectonic plates shifting in geopolitics, Bush might be tempted to spend his time in the diplomatic arena. He clearly feels more at home there. And he enjoys the company of his foreign policy team. Recently, he has been on the phone as many as a dozen times a day with his pal, Secretary of State James A. Baker III.

Yet while the United States must pay close heed to the breakup of the communist empire, the White House has an equally large stake in troubles brewing back home. The U.S. economy may seem strong today--and the Administration has the statistics to prove it--but, in private, serious thinkers in the government admit the foundations are rusting and need repair. America's position as the preeminent economic power is eroding.

The case should not be overstated. U.S. workers are still the most productive. The U.S. economy remains more than twice the size of the Japanese. During the 1980s, while the number of jobs in Western Europe increased by two million, the United States created nearly 16 million new jobs--and more than half are high-paying. Yet, some basic trend lines are moving in the wrong direction. As studies point out, U.S. productivity levels have been rising less rapidly during the 1980s than many nations in Asia and Europe. The U.S. savings rate, traditionally anemic, has sunk to a level four times below the Japanese. The federal debt is now so large that all personal tax collections west of the Mississippi were barely enough to pay last year's interest payments on the national debt. And where did those payments go? About $30 billion were sent to foreign creditors, twice as much as Washington spent on housing in a nation where a scandalous number of people sleep on sidewalk grates.

The 1990s promise not much better. A private document prepared by the Japanese Economic Planning Agency projects the Japanese economy will grow at a rate nearly twice that of America's from now through the year 2000, and Japanese per capita income will surpass that of the United States. The Japanese also expect Western Europe to grow more rapidly than America. Among prominent U.S. economists, C. Fred Bergsten now expects that because of the renewed strength of the dollar, the U.S. trade deficit will widen to $200 billion a year during the early 1990s and overall U.S. debt overseas will exceed $1 trillion by 1991.

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