Bush's `Agenda for Renewal'
ALTHOUGH President Bush's speech on the economy last Thursday in Detroit was billed as an "Agenda for American Renewal," the half-measures he advanced belied the ringing slogan. The program seems to add up to less than the sum of its parts, whatever merit each of those parts may - and in general do - have.
Skepticism about the program's effectiveness doesn't spring just from the much-noted fact that few of the proposals were "new": The White House can rightly complain that "old" ideas like urban enterprise zones or a capital-gains tax cut shouldn't be brushed aside when they haven't been tried. No, doubts about the president's economic agenda arise from the sense that even if Mr. Bush's program were enacted in its entirety, it wouldn't do enough to revive the torpid economy.
The president's discussion of profound changes affecting the United States economy evidenced an awareness of the new conditions facing American enterprise. But he conveyed no corresponding recognition that new conditions may require both traditional and new measures. Bush largely has fallen back on the Republican old-time religion of tax cuts, spending cuts, and free-market ingenuity.
To pull the country out of a specific recession with unique characteristics, Bush recommends a program that could have been proposed by any Republican president any time over the last 40 years, at any phase of the business cycle, under any conditions of inflation or national indebtedness.
The Bush plan has two glaring omissions. The first is significant measures to increase national investment, both public investment in infrastructure and worker training and private investment to increase productivity. Without such investment, it's hard to see where growth will come from.
The second omission is any meaningful attempt to reduce the strangling budget deficit. Bush's proposal to more than offset tax cuts with unspecified spending cuts far beyond anything he attempted in his first term lacks credibility.