WHY THE BUSH ADMINISTRATION IS WORSE THAN DIIULIO SAID

We're going to have to trade Will in for Johnathan Chait.

j/k Will.

When President Bush appointed a successor to Treasury Secretary Paul O'Neill earlier this month, a handful of news outlets (this magazine included) pointed out that the identity of Bush's pick was essentially irrelevant to economic policy-making. The policies that new Treasury Secretary John Snow will be asked to sell to the public--tax cuts, tax cuts, and more tax cuts--have already been crafted without any need for his input, thank you very much. Indeed, the fact that policymakers in the Bush administration have been reduced essentially to an ornamental role was spelled out explicitly in an article by reporter Ron Suskind in the January issue of Esquire. In the piece, former administration staffer John DiIulio, along with two anonymous White House officials, alleged that the White House has totally subsumed its policy-making to its political decisions. "There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus," DiIulio told Suskind. "What you've got is everything--and I mean everything--being run by the political arm." Lest anybody doubt DiIulio's analysis, a column on National Review Online by Republican economist Bruce Bartlett affirmed it. "[O]ne cannot dispute [DiIulio's] characterization because it clearly is true. Since the beginning of the Bush administration, insiders have complained to me that the policymaking process was not working," Bartlett wrote. "This vacuum in terms of policy analysis has tended to be filled by those in the White House who look at issues solely in terms of their political implications."

Suskind's explanation for this disturbing and unprecedented state of affairs is straightforward: The power wielded by political adviser Karl Rove (whether you believe he wields it for good or ill) is so great that he simply eclipses any other influence in the administration. "I was still regarding this White House in terms of the long-standing model," Suskind writes, "in which the art of political strategy is carefully balanced against serious policy discussion, in which church-state separations of these two distinct functions are respected, even championed. It seemed that in the person of Karl Rove such distinctions had been blurred."

But the total dominance of politics over policy in the Bush administration is not merely a function of personality; it is a reflection of deeper structural forces. Put simply, the administration is subservient to economic pressure groups to an extent that surpasses any administration in modern history. Whereas the Clinton administration was regularly forced to weigh policy demands from competing interests within the Democratic coalition, the Bush administration's presumptive allegiance in virtually every case is to corporate America. It is simply unnecessary for the White House to generate its own policies because that role has been filled by business lobbyists. Bush has abdicated to K Street the basic functions of domestic governance, not merely in cases where K Street's interests run roughshod over liberal principles, but in cases where they contradict conservative principles as well. Indeed, the simple rule for understanding Bush's economic policy is that in virtually every instance, whether tacking right or left, the president sides with whatever interest group has the strongest stake in the issue at hand. The result is an administration whose domestic actions persistently, almost uniformly, fail to uphold the broader public good.



ne might wonder why the Clinton administration was not captive to its economic supporters while the Bush administration is. The answer isn't, as some Clintonites have suggested, that the denizens of the previous White House possessed more moral courage than their successors. It's the deep asymmetry between the two parties' financial support. The Republicans receive support from business or from groups, such as the religious right, that don't oppose business's agenda. (Pat Robertson may not have any special passion for, say, protecting offshore tax havens, but he won't denounce them, either.) Democrats, by contrast, draw financial support from a broader range of interests--from corporate America, too, but also from labor, environmentalists, consumer groups, trial lawyers, and other associations whose agendas regularly conflict with those of business.

One way to think about this dynamic is a political science theory called democratic pluralism. Pluralism was a way of describing, and justifying, the system that emerged after World War II. The most active players in the political system of the 1950s and 1960s were large organizations like the United States Chamber of Commerce and the AFL-CIO. Even though these pressure groups wielded far more influence than everyday citizens, pluralism theory held that most citizens' interests were adequately accounted for anyway, because the various pressure groups represented them by proxy. Political scientists applied this theory to the U.S. political system as a whole, but currently it's a decent model only for the Democratic Party. That is, since Democrats must listen to representatives of business, labor, consumers, and others, the consensus that it reaches is usually a pretty good reflection of the broader good. But Republicans, whose base represents just a narrow elite sliver of the economy, usually fail to take account of the broader interest.

This dynamic does not apply to cultural issues--Republicans are no more subservient to the whims of social conservatives than Democrats are to social liberals. Nor does it apply to foreign policy, where both parties make policy largely free from the influence of organized special interests. And, while it should be noted that the Democratic Party as a whole draws from a variety of economic interests, individual Democratic politicians do not. In the Senate, for instance, New York Democrat Charles Schumer is essentially a tool of the financial industry; Louisiana's John Breaux, the oil and gas industry; Michigan's Carl Levin, the auto industry; and so on. But the diversity of, and lack of agreement between, these interests generally allows a Democratic administration to transcend this sort of parochialism. Conservatives attack the Democrats as beholden to unions and other left-wing special interests. Meanwhile, leftists like Ralph Nader attack it as having sold out its union and liberal allies for the embrace of business. They're both half right: Being beholden to everybody means being beholden to nobody.

This can be seen in the behavior of the Clinton administration. At the time, the president's dogged pursuit of soft money was seen both by liberals and conservatives as the apex of political sleaze. But, in fact, the breadth of Bill Clinton's fund-raising is precisely what insulated his decision-making from undue influence. In 1993, Clinton infuriated his labor allies, but pleased his business backers, by lobbying for and signing NAFTA. In 1995, he delighted trial lawyers, but angered lobbyists for business (especially in the Democrat-friendly technology industry), by vetoing a GOP-backed bill making it more difficult for investors to sue based on misleading financial reports. As surpluses emerged in the last few years of his term, Clinton stymied both the tax-cutting urges of his business allies and the spending urges of his labor allies by insisting on debt reduction. The point is not that Clinton got every policy decision right but that the discordant nature of his support put him in a position where, on most issues, it was at least possible for him to make a detached judgment on the merits. That is precisely what Bush cannot do.



he extent of the Bush administration's bond with the lobbyists of K Street is necessarily hidden from public view, since neither party to the relationship has any incentive to publicize it. But a sense of it can be gleaned from stories like the one that appeared in The Wall Street Journal last January. "Top administration officials," the Journal reported, "led by political adviser Karl Rove, have been meeting with industry lobbyists in recent weeks seeking input on the president's 2002 agenda." The article proceeded to detail the ways in which corporate America's wish list coincided with Bush's agenda for that year.

In fact, if you look at the major economic issues of the Bush presidency, in every instance Bush's position has been identical to that of whichever interest group applied the heaviest political pressure. On behalf of the accounting industry he fought tooth-and-nail against audit reform, until a 99 to zero Senate vote overwhelmed his opposition. (And, after the heat was off, Bush weakened the new auditing oversight board and reneged on his promise to boost the Securities and Exchange Commission's budget.) His energy bill was written in consultation with energy producers and reflected their desires almost perfectly. In signing legislation to overturn workplace ergonomic standards and supporting tougher bankruptcy standards on consumers, he fulfilled longtime corporate demands by using a broad-based corporate coalition. He fought campaign finance reform until opposition grew politically untenable, and even now his appointees to the Federal Election Commission are helping gut it. His telecommunications position preserved the monopoly status of local cable providers. His positions on prescription drugs and a patients' bill of rights were the positions of the drug industry and HMOs, respectively. He supported the oil companies in their quest to drill in Alaska and the auto companies in their disdain for higher fuel-efficiency standards. When, after the September 11 attacks, private airline security firms enlisted a massive lobbying effort to keep their contracts, Bush supported them (until that, too, became politically unsupportable). In none of these cases did organizations representing those affected by these policies--labor, environment, or consumer organizations--receive any meaningful hearing.

Paradoxically, the only major issue on which Bush exerted any discipline upon K Street was his tax cut. And even that was done in the spirit of mutual interest. Bush decided that if lobbyists loaded up the tax cut with business tax breaks, the entire thing might sink from its own weight. And so, business was persuaded to line up behind a tax cut that left corporate rates untouched--forming a "tax-relief coalition" that raised millions to press for the bill's passage--with the promise that subsequent bills would directly give corporations their long-sought breaks. (To be sure, corporate executives, as highly compensated individuals, would have benefited disproportionately from Bush's income tax cuts even if they hadn't been followed by corporate tax relief.) And indeed, last winter, Bush unsuccessfully pushed for a package of business breaks under the guise of "stimulus," and he is preparing to do so yet again this year.

It is often on the smaller issues, which receive almost no public attention, where the influence of lobbyists can be seen most clearly. There are countless such case studies, but, rather than slogging through all of them, consider just one: the Research and Experimentation Tax Credit. This was created in 1981 in order to reward companies whose product research generated broader scientific benefits. Alas, as Robert S. McIntyre of Citizens for Tax Justice has written, companies quickly claimed the credit for researching products with no merit whatsoever, such as Chicken McNuggets. In 1997, the Clinton Treasury Department imposed a new regulation restricting the credit to actual scientific advances. But, when Bush took office, his Treasury Department quickly rescinded it. Mark Weinberger, Bush's Assistant Secretary of the Treasury for Tax Policy at the time, had served as a tax lobbyist immediately prior to joining the administration. His clients included the R&E Tax Credit Coalition, which represented corporations seeking to preserve this particular scam. Early in his tenure, Weinberger described his goal to the Journal thusly: "I want to change the 'us versus them' mentality--the 'us' being government, the 'them' being business."

That line would serve as an appropriate epigram for Bush's governing philosophy. Since he's taken office, government and business have melded together as one big "us." Scores of mid-level appointees, like Weinberger, oversee industries for which they once worked. Deputy Interior Secretary J. Steven Griles is a former coal-bed methane lobbyist. Interior Department Solicitor William Geary Myers III previously lobbied to preserve federal grazing subsidies. Assistant Secretary of Energy for Fossil Energy Carl Michael Smith came to government from the oil industry and told one oil and gas group that his job is to determine "how best to utilize taxpayer dollars to the benefit of industry." The prevalence of such appointees is a stark departure from the previous administration. "Clinton weighed factors other than whether you contributed significantly to his campaign," explains G. Calvin MacKenzie, who studies presidential appointees for the Brookings Institution.

It has become common under Bush not only for appointees to move easily between pleading for industry and adjudicating such pleadings but to do both simultaneously. Republican National Committee (RNC) Chairman Marc Racicot not only comes from K Street (which is hardly unprecedented for either party) but proposed to continue his lobbying work while serving as party chairman. The unpleasant symbolism of this forced Racicot to reverse himself, but the real scandal wasn't that his lobbying would conflict with his chairmanship of the RNC--it was that it wouldn't. Last year, Enron Chairman Kenneth L. Lay privately promised to support keeping the chairman of the Federal Energy Regulatory Commission (FERC) if he would reverse his stance on energy regulation--implying that Lay had veto power over the FERC chairmanship. My colleague Jonathan Cohn reported in these pages last week that two members of the Advisory Committee on Childhood Lead Poisoning Prevention were solicited for their positions not by the Bush administration but by the lead industry itself (see "Toxic," December 23). That is, lobbyists have in some instances literally taken over the responsibilities of governing.



ush's defenders would no doubt maintain that it's only natural that a conservative president regularly sides with business, which usually desires less taxation and regulation. It's true that, in most instances, conservative ideology and business self-interest both militate toward the same end. Yet no disinterested conservative ideology would take the form of Bush's actual mix of policies. His energy bill, proposing massive new production subsidies, earned disdain from free-market purists like National Review and the Cato Institute. Bush has quietly acquiesced to congressional pork, declining to veto a single spending bill. Meanwhile, he has cut funding for programs--such as recovery of loose radioactive material--that many conservatives support but that lack powerful constituencies. Back in the 1980s, Ronald Reagan's Budget Director David Stockman pledged to attack "weak claims, not weak clients." Bush has done just the opposite.

One of the great perversities of Bush's domestic policy is that, when he does deviate from conservatism, he follows this same pattern--that is, he tacks left not because it is in the broad public interest but because it will please a narrow but powerful special interest. Take, for example, the three domestic policy decisions for which he has taken the most flak from free-market conservatives: support for farm subsidies and for tariffs on steel and textiles. In each case, Bush acquiesced to the demands of a small, organized minority whose interests clearly run contrary to those of the majority. Studies have found that every job saved by tariffs costs consumers $800,000 in higher prices. Farm subsidies are even less justifiable: They artificially deluge the agriculture industry and transfer money to relatively affluent farmers by boosting the price of food, which disproportionately hurts the poor. Note that in all those instances Clinton managed to stand up to the special pleaders, despite the fact that acquiescing would have been more compatible with his ideology than it was with Bush's.

Perhaps the most important common element of Bush's leftward lurches is that they involve adopting positions through which he can win favor with a Democratic-leaning pressure group without running up against business interests. For instance, Bush has embraced scandal-tarred carpenters' union President Douglas McCarron and Teamsters President James P. Hoffa--this despite the fact that GOP opposition to organized labor is frequently explained by aversion to "corrupt union bosses." So why has Bush cozied up to two of the more controversial bosses around? Because, as my colleague John B. Judis has pointed out, whereas most union leaders' top priorities involve winning concessions from employers, both McCarron and Hoffa are equally concerned with having the administration help them with internal issues--in McCarron's case, squelching a court case brought by reformers within the union (see "Drill Sergeant," December 16); in Hoffa's, lifting the Independent Review Board that oversees the union as a result of past transgressions (see "Dirty Deal," April 1 & 8, 2002).



he only factor that clearly mitigates Bush's embrace of an agenda set by the business sector is his own sense of political self-preservation. After all, if the administration is publicly discredited as shilling for K Street, then it will be less effective at shilling for K Street. This is where Rove comes in. Sometimes half-measures (say, an industry-friendly prescription-drug plan) must be embraced to stave off more sweeping changes. Other times full retreat (as on airport security) is required in order to avoid a p.r. debacle. Hence Bush approved offshore drilling in politically marginal California but not in politically crucial Florida. This is also the reason that Bush has not endorsed some of the business lobby's more politically unattainable goals, such as complete abolition of the corporate income tax. This caution should not be mistaken for principled independence.

But caution has generally proved to be unnecessary for this White House because the public so rarely has focused upon Bush's domestic agenda. The reason for this lies in another phenomenon of political science: Bad policies can exist when they have concentrated benefits and diffuse costs. For instance, the public should be outraged at steel tariffs, but in fact most people are not because the cost to each individual is very low. The people who care the most about steel tariffs are those who work in the steel industry, and they're all for tariffs. Likewise, few people have any desire to run long-term deficits in order to provide a large tax cut for the affluent. But the people who stand to gain the most from such tax cuts tend to appreciate them a great deal, and they express their appreciation, among other ways, in the form of political donations that can be used to help convince the majority that the tax cuts are actually aimed at them.

On virtually every issue that has come before him, Bush has sided with the intense preferences of the well-organized minority. Judging from his lofty polls and his bulging coffers, the strategy has worked brilliantly. In a democracy, of course, you can never completely discount the possibility that the majority will eventually focus on the fact that it is getting persistently fleeced. From what we've seen of Karl Rove, though, he doesn't appear very worried.

Jonathan Chait is a senior editor at TNR.

 

lol ATrain.

In summary, Bush is a corporate w****. Clinton was too, but due to the differences in coalitions, the Democrats have to make decisions that encompass all Americans, while ie, Conservative Christian Groups could care less about the corporate pandering done by their elected officials, since *whoo hoo! we're in office*.

Bush bases his policy decisions on who has the loudest voice(s). When it appears that Bush is leaning to the left, just look for the correlation to the strongest lobbying group. Examples are in the text.

 

thanks TheFreak (doh! )

 

true bobrek... I'm anxious to see what the FAA's response would be.

It is arguable that all of the chemical tests they run are more comprehensive than the simple yes/no do you have a lighter test. Then again, given all of the asinine rules (no skillets? what is this? I Love Lucy?) you have to wonder what the big deal with simply taking someone's lighter away from them could be. If the terrorists get MacGyver, they certainly know a number of ways in which a lighter can be turned into a WMD.

"Don't post", LOL. Are you lazy or do you really have this much trouble with reading comprehension? I guess this is the best retaliation that Bush lovers can come up with? Dork.

The "smaller issues" point by Chait is simply this: the administration is so petty that they do not even reach the higher ground on these lesser issues. They still appeal to the powerful lobbying groups on those issues.

ps, way to dismantle the rest of the 8K word post.

ps, way to overlook the fact that the article starts out with information from republican insiders via the National Review (in addition to DiIulio's points).