President Bush couldn't ask for a better Christmas present: a cheery outlook for the economy all the way up to the election.
Forecasters see strong growth, low inflation, and falling unemployment. That means he's much less likely to lose the Oval Office as his father did in 1992, when only 24 percent of Americans said the economy was doing well. A recent Wall Street Journal poll by Peter Hart found 55 percent of those surveyed say the economy is in good shape.
Yet, while the election-year outlook is positive, it's not flawless. A stock market rebound remains tentative, and heavy debt loads have left the finances of lower-income households - those without sizable stock holdings or significant home equity - "in tatters," according to Economy.com.
And the number of new jobs will be "subdued when compared to the past," predicts US Chamber of Commerce chief economist Martin Regalia. Rapid gains in productivity - the efficiency with which US factories use labor - hold down hiring.
Then, too, unpredictable factors such a major terrorist event or intensified conflict in the Middle East that might raise oil prices could dim the rosy forecasts for 2004.
That's why it's worth considering what President Bush plans to do next year to help the economy after 2004. One report says he intends to unveil new ways to ensure workers have the tools to find new places in a rapidly changing workplace, where higher-level skills and portability of benefits are needed.
Offering workers training for new types of jobs and making it easier for them to keep pensions and health insurance would help in job mobility and adaptability.
But even more is needed. Despite the economic recovery, the budget deficit is expected to top $500 billion in 2004. If it keeps rising, the government's need to borrow money to pay the debt could raise interest rates and reduce growth.
A new report from the nonpartisan Congressional Budget Office concludes, "Unless taxation reaches levels that are unprecedented in the United States, current spending policies will probably be financially unsustainable over the next 50 years."
An economic expansion is the best time to find the difficult but necessary solutions to the looming budgetary challenges. Waiting will only make the task harder.