The Bush II agenda takes shape

He signals plans to fix Social Security system, revamp tax code, and update school reforms.

President Bush seems determined to begin his second term with a burst of political energy.

Perhaps mindful that reelected presidents can lose power quickly, Mr. Bush has already outlined a domestic agenda that in some ways is more ambitious than the one he laid out four years ago.

From reform of the tax code and Social Security to updates for the No Child Left Behind education law, the items the president has mentioned touch on some of the most fundamental aspects of American government. If all are enacted, history might judge the Bush presidency a conservative counterpart to Lyndon B. Johnson's Great Society.

But that is a very large "if." As LBJ found, foreign-policy struggles can overwhelm the best-laid domestic plans. And many of the details of Bush's agenda - such as his proposal to add personal retirement accounts to Social Security - are anathema to Democrats. In the wake of victory, Bush has vowed to unite the nation, but his domestic plans could prove divisive.

On Wednesday, only hours after his victory was finally assured, President Bush said that he had a lengthy "to-do" list for his second term. "We'll reform our outdated tax code. We'll strengthen ... Social Security for the next generation. We'll make public schools all they can be. And we will uphold our deepest values of family and faith," said Bush.

At a press conference on Thursday Bush reiterated this list, and said again that he intends to unite, not divide, the nation. "The campaign over, Americans are expecting a bipartisan effort and results. I will reach out to everyone who shares our goals," Bush said.

The president sidestepped questions about Cabinet changes and the Supreme Court. But filling a possible vacancy on the high court could be one of the first items of his second term agenda. Details of this and other aspects of the Bush domestic agenda follow:


With an ailing chief justice at the US Supreme Court and a larger Republican majority in the Senate, the big question in the judiciary is whether Bush in his second term will aggressively seek to place conservatives on the federal bench - including at the nation's highest court.

Senate Democrats have blocked ten Bush appeals court nominees with filibusters, preventing up or down floor votes for confirmation. Many conservatives view this as as unfair, and it may have contributed to the defeat of Senate minority leader Tom Daschle, an architect of the filibusters.

But not all Republicans are thrilled with the prospect of all-out warfare in the Senate over judicial appointments. Sen. Arlen Specter, expected to become the next chairman of the Senate Judiciary Committee, has warned the president against naming nominees who might be too conservative to win broad Senate support.

The issue takes on a new sense of urgency amid reports earlier this week that Chief Justice William Rehnquist's recently disclosed battle with cancer may be more serious than initially thought. A Rehnquist retirement would raise two issues. First, who should become the next chief justice? And second, if the new chief justice is selected from among the existing justices, who from outside should join the court?

Since Rehnquist is a solid member of the court's conservative wing, his departure and replacement with even a Rehnquist clone would not threaten to undermine landmark liberal precedents on abortion, affirmative action, and gay rights, among others. But his replacement by someone who is more moderate than Rehnquist could jeopardize landmark rulings important to conservatives, such as the recent 5-4 federalism decisions reasserting sovereign state power in the face of federal encroachment. If the White House seeks to protect such conservative rulings, the stage may thus be set for major nomination battles in the Senate.


President Bush talks of tax reform, especially the popular idea of tax simplification. Getting any such bill through Congress, though, will be hard, despite enlarged GOP majorities in both houses.

President Reagan managed to get a widely praised tax simplification measure passed in 1986. But Reagan sweetened the legislation by including personal income tax cuts, especially large for upper income people, recalls Robert Reischauer, president of the Urban Institute in Washington.

Bush said Thursday that he wanted tax simplification to be revenue neutral. The revenue costs of the Reagan cuts, with the same goal in mind, were offset by higher taxes on business. But corporate executives, seeing their personal taxes slashed, went along with the reform bill.

Since then, business has won so many tax breaks in Congress that the tax code has become enormously more complicated, and the overall corporate tax burden dramatically reduced.

The complication for Bush is that his tax cuts of 2001 and 2003 already were slanted in their benefits toward the rich.

One goal of tax cuts in the past four years, and expected to be reflected in tax proposals in the four years ahead, is to gradually shrink taxes on earnings from capital and investment. Supply side enthusiasts in the administration and in Congress see such a change as a stimulus to economic growth.

The problem is that such measures also can accentuate an increasing divide between the rich and poor, since the bulk of capital (stocks, bonds, businesses, etc.) is still owned by the well-to-do. The distribution of income in the US has become more unequal for some 30 years, through both Democratic and Republican regimes.

There is speculation that Bush will seek a flat income tax, with all brackets paying the same rate, or a national sales tax. Both could worsen income inequality.


During his campaign, President Bush often touched what is commonly termed the "third rail" of politics - changing the Social Security system. And he survived any political shock.

Bush avoids using the term favored by many economists - "privatization." But the president did speak of instituting private accounts for younger participants in the pension and disability system, leaving older workers and retirees untouched. So far, Bush has outlined no details.

"We have only rhetoric from the president," notes Peter Orszag, a Brookings Institution expert.

Any transition would be expensive. Depending on details, it could cost $1 trillion to $2 trillion over 10 years to make up lost revenues if only 2 percent of payroll taxes are switched into private accounts.

Daniel Mitchell, a Heritage Foundation economist, admits Social Security change has costs up front, but says long-term savings would more than offset these. He advocates Uncle Sam borrow the transition costs to move to full privatization. "It's less than the cost of doing nothing," he says.

But chances of getting such an ambitious program through Congress are considered slim. Any change would add to an already large budget deficit and could endanger reelection prospects of Republican members of the House in two years.


The main challenge in a second term will be correcting perceived problems with the No Child Left Behind law, Bush's signature education achievement in his first term. The law uses federal education dollars to leverage changes in local schools, including annual testing in early grades. But its complex formulas have led to unintended results. Look for new proposals to promote annual testing and proof of "adequate yearly progress" for subgroups of students in the nation's high schools.

A leading question is whether the president will claim a mandate to get back to the derailed idea of school vouchers. This is a long shot, but would be a return to Bush's desire to shift from maintaining schools to promoting choice.


Look for a return to the "compassionate conservativism," including more efforts to expand federal funding for faith-based social initiatives, especially in prison reform and drug treatment. Congressional leaders expect a new drive to pass a constitutional amendment defining marriage as between a man and a woman, and a push for a comprehensive ban on human cloning. "Human life is a creation of God, not a commodity to be exploited by man," says Bush.

Coming off an election in which many voters cited "morals" as a top concern, Bush may use that mandate to promote responsible fatherhood, abstinence-only sex education, and "healthy marriages" in the reauthorization of welfare reform.

Bush made campaign pledges to triple federal funds for abstinence programs in schools and community-based programs. The president can expect support from Senate moderates like Sens. Joseph Lieberman (D) of Connecticut and Evan Bayh (D) of Indiana on some of his agenda. In the 108th Congress, faith-based initiatives derailed in the Senate over whether faith groups seeking funding should be required to end discrimination in hiring.

David R. Francis, Warren Richey, and Gail Russell Chaddock contributed.

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