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In the wake of their electoral victory on Nov. 5, President Bush and the congressional GOP leadership are quietly setting the stage to dismantle all that remains of Democratic-style Big Government. The attack will target both regulations and domestic spending programs aimed at environmental and consumer protection, ensuring worker rights, and fighting poverty. In part, the strategy will be a replay of Ronald Reagan's efforts to "starve the beast" by slashing federal tax revenues back in the early 1980s. But the Bush effort will go far beyond just tax cuts.
While Reagan's efforts succeeded only modestly -- government spending for domestic programs fell by only about 1% of gross domestic product during his eight years in office -- Bush is poised to have much more success. Why? A fortuitous combination of public support for tax cuts, a costly but immensely popular war on terrorism, a growing budget deficit, a demoralized Democratic party, and -- perhaps most important -- an energized and disciplined congressional GOP leadership.
TOEING THE PARTY LINE. Already, the White House, House Majority Leader Tom DeLay (R-Tex.), and newly anointed Senate GOP Leader Trent Lott (R-Miss.) are assembling the blueprint. Their goal: consolidate power at the top, reduce the influence of committees and party moderates, and prepare for a legislative blitz next spring.
In the past week, they've have eased Senator Pete Domenci (R-N.M.) out of line to resume his post as chairman of the Budget Committee. Domenici was considered too bipartisan and insufficiently enthusiastic about tax cuts. He'll be replaced by Senator Don Nickels (R-Okla.), a shrewd, committed, antigovernment tax-cutter. This is a key step because, under arcane congressional rules, the budget committee will have enormous influence over both spending and tax cuts.
At the same time, the House GOP leadership has stripped its Appropriations Committee members of much of their power. The panel's subcommittee chairmen have been ordered to get in line or risk losing their posts. Usually, when power changes hands in the Capitol, even spendthrift senators become advocates for more domestic spending when they win such posts. Not this time.
RED-INK STRATAGEM. The third, and even more obscure, personnel move will be to place a stalwart of supply-side economics in the key post of director of the Congressional Budget Office. The CBO director can make or break bills simply by estimating how much they'll cost or how much revenue tax measures will raise. You can bet the once largely nonpartisan post will be filled by someone totally loyal to the Bush agenda (see BW Online, 5/30/02, "There's No Accounting for Politics").
Once the people are in place, Bush and his allies will push for big new tax cuts, both long- and short-term measures. These will reduce federal revenues by trillions of dollars, draining the resources available to fund traditional domestic programs. Next, the GOP will demand ever-more funding for the war on terrorism.
The backdrop to the debate will be the deficit. Although Bush's own tax cuts were largely responsible for the recent return of red ink, the President will use the problem to justify clamping down on spending that's not tied to the terrorism fight.
TASTE FOR PORK. On the regulatory front, Bush will step up efforts to overturn or ease enforcement of regulations aimed at ensuring worker safety and environmental and consumer protections -- rules he considers to be antibusiness. Slashing spending for things like the Environmental Protection Agency will only make those initiatives easier. And with the GOP in charge in Congress, Democrats have lost their ability to use congressional hearings to showcase the policy successes of such federal agencies.
Bush is also remaking the federal bureaucracy, trying to shift hundreds of thousands of jobs to private contractors and stripping government workers of civil-service protections.
Of course, he won't entirely succeed. All politicians tend to overreach when they think they have a mandate, and this year's GOP tide will be no exception. Besides, many Republican lawmakers like government spending just as much as their Democratic colleagues. And as the 2004 election nears, they'll increasingly demand the opportunity to cut ribbons on some costly new projects back home.
For better or worse, however, it looks increasingly likely that President Bush will do more to change the face of Washington than even Reagan did. That would be quite a coup for a man who, just two years ago, was considered a minority President with little clout.
Gleckman is a senior correspondent in BusinessWeek's Washington bureau. Follow his views every Tuesday in Washington
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