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MARKETS IN CRISIS

Bush to Press Congress on Economic Plan

Politics: As the public's mood sours over the plunging stock market, the White House shifts strategy with an eye on the midterm elections.

July 21, 2002|RONALD BROWNSTEIN | TIMES STAFF WRITER

WASHINGTON — Faced with a plunging stock market, a souring mood among voters and anxious cries from his fellow Republicans, President Bush has decided not to push forward new policy proposals but to "ramp up the focus on Congress" to complete action on corporate reform legislation and approve key elements of his economic agenda.

A day after the Dow Jones industrial average fell nearly 400 points to a four-year low, a senior White House official said Saturday that Bush's economic strategy for the immediate future is to take advantage of a president's ability to make his voice heard above the competition.

"History shows when presidents focus on solutions, Congress tends to tie itself in knots by getting down in the weeds," the White House official said. "Congress has an uphill battle when it comes to communicating with America."

Accordingly, Bush will focus his energies this week on pressing Senate and House negotiators to move faster on corporate accounting reforms and the House to complete action on the new Department of Homeland Security. He will also sign a supplemental appropriation bill that should pump more money into the economy.

The emerging Democratic strategy, which will carry forward to the fall elections, when Democratic control of the Senate and GOP dominance in the House are on the line, is to tie the economy's troubles to corporate misconduct and then to tie Bush and congressional Republicans to big business.

Bush, in his radio address Saturday, previewed the Republican response: While trying to identify himself with the cause of corporate reform, he pointed a finger at Congress for failing to provide him enhanced authority to negotiate trade deals and to control spending, which he said threatens a "decade of deficits."

"As Congress approaches the August recess," Bush insisted, "it must take decisive steps to provide economic security to the American people."

Substantively, the White House believes, at least for now, that the president has done all he can, or needs to do, to stem the stock market decline.

Rhetorically, however, Bush is casting himself as a leading proponent of corporate reform. And the White House has sidestepped questions about how far the president would move toward the Democratic Senate's version of corporate accounting reform, which is seen as tougher than Bush's.

The White House will say only that Bush and Sen. Paul S. Sarbanes (D-Md.) share many goals and that the president will wait to see what emerges from the conference committee that is trying to reconcile the House and Senate bills.

While leaving the door open on tougher corporate reform, the White House continues to resist GOP suggestions to shake up the administration's economic team. Even some Republicans are telling Bush he could bolster consumer confidence and the market by getting get rid of Treasury Secretary Paul H. O'Neill and Securities and Exchange Commission Chairman Harvey Pitt. Bush and his aides say they remain firmly behind both men.

The White House drive to focus public attention on Congress is meant to send the message that, while Bush is standing pat on policy and personnel, he is not insensitive to the pain and apprehension of voters.

"From a political point of view, he needs to be out there, show empathy, convey an impression he is in charge," political consultant Stuart Rothenberg said. "A lot of times in politics, politicians just have to hold on and ride out the storm."

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Mood Grows Gloomy

The backdrop for this maneuvering is a sharp deterioration in the country's mood. While Bush's job approval rating has remained high, the share of Americans who say the country is on the right track has plummeted with the stock market.

"It is a lack of a sense of security that is turning people into a foul mood," says independent pollster John Zogby.

This widening unease may be changing the landscape for the midterm elections in November. For months, Republicans have hoped Bush's astronomical approval ratings would boost their prospects. Now there is growing concern that anxiety about the country's direction may prove a more decisive factor in the election--and slowly erode Bush's strong support as well.

"Privately, Republican consultants are a little worried. Polls tend to lag," conservative analyst William Kristol said, but he predicted the tide will turn.

"Right now we're in the panic mode where everyone wants to be tough. I predict there will be a moment in the next week or two where the president turns on the Democrats for being too indiscriminate in attacking business," Kristol said.

Yet if optimism about the country's direction continues to fall, "then inevitably Bush is going to fall with it," says Republican pollster Bill McInturff.

Faced with that prospect, Republicans appear to have decided that the best defense is a good offense. Over the last few days, key GOP leaders have escalated criticism of congressional Democrats for blocking key elements of Bush's agenda.

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