The promise of prosperity

January 29, 2003

A YEAR AGO, in his first State of the Union address, President Bush offered a one-word solution to America's economic problems: jobs. He followed with tax cuts of historic proportions. And indeed, the economy grew at a decent clip - all the while shedding so many jobs that the unemployment rate is now at an eight-year high.

Last night, Mr. Bush opened his second such speech by peddling his new economic plan based on the same old supply-side elixir of tax cuts driving growth - a plan with only one certain economic impact: ballooning federal budget deficits for the foreseeable future.

Confronting growing skepticism about his competence to manage the nation's economy, the president once again conjured the promise of prosperity for all - through fast-forwarding the tax cuts enacted last year and providing new ones disproportionately to the well-off. "We must have an economy that grows fast enough to employ every man and woman who seeks a job," he said, linking growth to spending and spending to tax cuts. Never mind the past year.

Give the president credit for staying on ideological point. But pay attention to those he has labeled class warriors, his Democratic critics, who remind us he's racking up the worst job creation record of any president since World War II - while staging a giveaway for the wealthy.

Also, give the president credit for proposing to spend another $400 billion on Medicare over the next decade. Trouble is, if his tax cuts pass, costing the U.S. Treasury $674 billion over the same period, and that promised supply-drive boom does not develop, Medicare - to say nothing of Social Security - will be even more financially overwhelmed by aging baby boomers.

But this president is selling aspirations. He's reaching out to middle-class suburbanites, perceived by his advisers to have cast their lot with Wall Street because they have their toes in the market. In reality, Mr. Bush's tax cuts, including his proposed tax-free dividends, would mostly benefit those making more than $100,000 a year.

He may be banking on a replay of the 1990s, when the gap between the rich and poor continued to widen - but all income levels ended up better off and poverty declined. Much of this was attributed to productivity gains, and they're continuing - but without the job gains of the '90s.

The prospect of a jobless recovery, which sunk the re-election bid of Mr. Bush's father in 1992, must haunt the president. It's a very real prospect.

Sure, the economy right now suffers from business and investor uncertainties over Iraq that likely will dissipate with any resolution, belligerent or peaceful. But the more certain immediate result of the president's economic plan is not jobs but federal revenue cuts turned into nice windfalls for those already doing quite well. All else - and particularly Mr. Bush's vision of an economic expansion - is, once again, just a promise.

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