BUSINESSWEEK ONLINE : DECEMBER 18, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY

How Bush Would Lead
He'd face a slowing economy, divided Congress, and uneasy nation. But don't judge George W. yet

Right about now, a slightly shell-shocked George W. Bush may be wondering just what it was, besides an urge to uphold the family honor, that drove him to launch his White House bid in the first place. For weeks, the Texan has been fretting and fidgeting, struggling uncomfortably to shape a Virtual Presidency while Democrats launched legal challenges to Florida's electoral votes. Now, with rival Al Gore just about out of time and legal options to overturn the election, Bush can finally close his eyes and entertain visions of black-tie soirees and Inaugural parades. Bye-bye, ''Governor.'' Hello, ''Mr. President.''

But will it be a dream fulfilled--or the beginning of a four-year nightmare? No U.S. leader in more than 100 years would take office under more divisive circumstances. Not only did Bush lose the popular vote and see GOP congressional allies punished at the polls, but his ascension will have been rendered an anticlimax because of legal wrangling. The result: Inauguration Day will be more a moment of national relief than of celebration.

If George Walker Bush takes the oath of office on Jan. 20, he will lay claim to a bitter prize: a divided nation, a hamstrung Congress, and a weakening economy that might demand quick reflexes in a capital littered with land mines. ''It looks like a rocky road,'' says pollster John Zogby, expressing the prevailing view in the political community. Even before Bush sets foot in the Oval Office, Zogby fears he is typecast as a pol ''without much political savvy and with no clear direction from the public.''

It seems like a formula for frustration. But you might want to hold off a bit on the requiems for a failed Presidency. Although his public career has been brief, Bush has acquired a reputation as one of the most underrated politicians in the country. Partly, this is due to a clenched, taciturn speaking style that owes more to Midland, Tex., than New Haven, where Bush navigated Yale University without much pause for reflection. Partly, it's attributable to Bush's fondness for delegation of authority, a trait foes mistake for laziness.

BATTLE-TESTED TEAM. In reality, Dubya has proven to be a savvy negotiator, a tough campaigner, an artless but effective debater, and most of all, a man with the discipline to win. With his early personnel picks of Washington veterans such as running mate Richard B. Cheney, Chief of Staff-designate Andrew H. Card Jr., and Secretary of State-in-waiting Colin L. Powell, he is building a battle-tested team for a tough slog (page 44).

If Bush actually listens to the people he's hiring and adopts the public mood of cautious incrementalism, he could skirt the abyss. Far from a preordained catastrophe, a new Bush Administration could achieve a modicum of success in the face of long odds.

For business executives, the immediate concern is pragmatic: Can Bush, whose communication skills during the post-Nov. 7 interregnum struck many as uninspiring at best, rally the country? Can he resist the tendency to equate victory with validation and condense an ambitious conservative platform into a sparer, more centrist agenda? Most important, can he turn those paeans to bipartisanship into reality, overcoming resistance from GOP hard-liners by bringing Democrats into his coalition?

For the moment, business leaders are bucking themselves up by insisting Bush will grow in office, but their fingers are crossed. ''Bush will have an easier time moving forward than Gore would have,'' says Matthew E. Massengill, CEO of Western Digital Corp. ''The guy can't communicate, but he'll get better at that. His father wasn't exactly a world-class orator either. But he'll be able to say what he needs to say. The meaning is there.'' Adds Jeffrey T. Leeds, principal of Leeds Equity Partners, a New York buyout firm: ''I think Bush will reach out and [build] bridges to Democrats and independents.''

For dejected Democratic partisans, the only bridges Bush will be building will be in preparation for an ignominious retreat from Washington. Bush, the Sequel, strikes them as a disaster epic on the scale of Titanic. Many believe the Texan takes office as a hobbled leader, with his party's grip on Congress too weak to offer much support. ''Never has a President started with a harder job,'' says Andrew L. Stern, president of the Service Employees International Union.

CAMPAIGN RELICS. True enough. But as partisan passions over the close election cool, Bush's road ahead will come into sharper focus and his chances will begin to look better. How? For starters, no matter how polarized Americans are now, there is a tendency to coalesce around a new President in his first year. The period of goodwill may be fleeting in 2001, but it still represents an opportunity if Bush governs from the center. ''Bush is a pragmatist,'' says Card. ''Despite all these expectations of gridlock, he will try to bridge the partisan gap.''

Another huge concern is the darkening economic climate---an environment Cheney likens to ''the front edge of a recession.'' Yet it is by no means certain that a downturn--if one materializes next year--would be Bush's undoing. Typically, a slump that hits early in a new Administration is blamed on the preceding White House crew--or on the overexertions of inflation-phobes at the Federal Reserve. A stimulus package and a coordinated show of resolve could permit the new Prez to weather even a dreary year marked by corporate restructuring and layoffs.

Another reason the new President might skirt immediate disaster is that Bush's innate pragmatism could lead to some preemptive downsizing. That means whittling back his Big Promises agenda in favor of a more modest program that envisions passage of only a handful of legislative measures blessed by bipartisan support. Take that $1.6 trillion tax cut built around slashing marginal rates. After a token fight, it could become a relic of the campaign. According to a Bush adviser, a consensus tax package could be constructed around relief for estates and married couples, reducing the 15% bottom bracket to 10%, and a smattering of Gore-style targeted incentives. Under this scenario, plans for collapsing the 39% and 36% tax brackets into a new 33% top tier could be shelved--but only over Bush's ritual protests. Read his lips: Things have changed.

''If your goal is to stimulate the economy, we should probably do a middle-class tax cut,'' says Representative Robert T. Matsui (D-Calif.), a member of the House Ways & Means Committee. The key to Democrats' hearts: a threshold that prevents the well-to-do from reaping a windfall. Similarly, the call for partial privatization of Social Security is likely to fade from a high priority to a study topic.

CHIEF CHEERLEADER. Other divisive issues, from school vouchers to billions for a Star Wars antimissile system, all could slide off the agenda in a Congress where delicate coalition-crafting is the name of the game (page 48). ''It's going to be tough to get massive packages through,'' says a Bush policy adviser. ''Maybe half a loaf is pretty good.''

Actually, the downbeat mood may present an opportunity. ''Public expectations are as low as they've been for anyone since Harry S Truman, the failed haberdasher who dared to be President,'' says American University historian Allan J. Lichtman. ''Bush is seen as a weak leader coming in under impossible circumstances. Any accomplishments will exceed expectations.''

Bush could react by carving out a new role in stark contrast to the one Bill Clinton pursued as Strategist-in-Chief. Meet Just Plain George, Cheerleader-in-Chief. Forced to promote national harmony, Bush could be less concerned about lighting up the legislative scoreboard. ''He will call, he will visit, he will do all the right things to be seen as flexible,'' says one corporate rep who served in previous GOP Administrations. ''But ultimately, very little gets done unless there has been prior [bipartisan] spadework. This could be a disaster for Republicans, because we seem to have control but can't make much happen.''

Although Bush's path is strewn with challenges, even some Democrats concede that he can still prevail. Says a Democratic lobbyist who served in the Clinton White House: ''Things were pretty dark for our side back in '95-'96, yet we survived five government shutdowns and passed a minimum-wage bill, welfare reform, and a health-care bill. A clever President willing to push against his base can succeed.''

If Bush can create the climate for a partisan thaw, a trickle of meaningful legislation might find its way to enactment--to the benefit of both sides. It will take finesse. It will take a mastery of the bully pulpit--and the Presidential TelePrompTer--that Bush hasn't shown since his dead-on acceptance speech at the GOP convention in Philadelphia. And yes, it will take Bill Clinton's surpassing skill at triangulation--the art of playing the political fringes off against each other while defending the vital center.

Skeptics who insist that the Bush who pandered at Bob Jones University doesn't have the right stuff should recall a less noted episode in the primary campaign, when right-wingers in Congress pushed a plan to make up a budget shortfall by crunching such popular antipoverty programs as the Earned Income Tax Credit. Bush's response to Capitol Hill Republicans was blunt: ''I don't believe you should balance the budget on the backs of the poor.'' That was enough to kill the plan in its tracks and lend credence to the notion that Bush might actually be a different kind of conservative: one with a heart and a brain. Now, all he has to do is prove it--on a vastly larger and more demanding stage.

By Lee Walczak, with Richard S. Dunham, Amy Borrus, and Rich Miller, in Washington, and with bureau reports

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