By Richard S. Dunham You would have to go back to Lyndon Johnson to find a President who has been as successful in his first year in office as George W. Bush (see BW Online, 12/17/01, "Accidental President" No More?"). But in the what-have-you-done-for-me-lately world of American politics, Bush faces a series of tough challenges in 2002. Here are the 10 biggest tests ahead for the 43rd President:
W's dad won the war in the Persian Gulf but lost the peace by failing to remove Saddam Hussein from power in Iraq. Atop the current President's 2002 wish list is the vanquishing of Osama bin Laden. As long as the al Qaeda leader remains free or unaccounted for, the White House will remain on war alert -- and very nervous.
The War's New Front(s)
Now that the Taliban's reign of terror in Afghanistan is over, the President has promised further action in the war against global terrorism. But where? India wants action against Kashmiri radicals. Sri Lanka would like to crush Tamil separatists. Israel wants to punish Palestinian warlords. American military operations are still possible against radical Islamic cells in Somalia, Sudan, Indonesia, and the Philippines.
The toughest call for the Bush Administration is whether to go after Hussein, who steadfastly refuses to allow international observers to oversee Iraq's chemical, biological, and nuclear weapons capabilities. If Bush does go after Hussein, keeping the multinational coalition together won't be easy.
Fixing the Economy
The good news for Bush is that the Taliban have been ousted from power. The bad news is that the American people may now focus more of their attention on the sorry state of the economy. While Bush isn't being blamed for the bad times, he eventually will take the rap if voters conclude that he isn't doing enough -- or is doing the wrong things.
Thus far, the President's first response to every economic issue has been to cut taxes. (Second response: Blame the trial lawyers.) It seems as if the Administration's economic team is hoping that the economy rebounds on its own. Further complicating matters: The budget surplus of 1998-2001 is gone, and not much money is available to stimulate the economy through either tax cuts (the supply-side way) or government spending (the Keynsian approach). Bush will have to come up with a viable plan that both soothes voters and works as a tonic on the economy.
The Vision Thing
Bush has already accomplished much of his campaign "to-do" list. So what now? The White House needs to come up with a new agenda that captures Americans' imagination. Among the possibilities: health-care reform, regulatory relief, privatization of government services, more reforms of the welfare system, or perhaps emergency assistance to financially strapped state governments. Cries for more tax cuts may stir the blood of Republican stalwarts, but there's more to effective governing than that.
Dealing with Daschle
Nerves of steel are behind the "aw shucks" smile of Senate Majority Leader Thomas Daschle (D-S.D.). He has become the chief spokesman and strategist for the Democratic Party, eclipsing both former Vice-President Al Gore and House Minority Leader Richard A. Gephardt (D-Mo.). Daschle wields a powerful weapon: He can hold up the President's domestic agenda if the White House and right-wing Capitol Hill Republicans refuse to meet Democrats halfway. Bush's ability to work with -- or around -- the liberal Daschle could well determine the course of his Presidency from here on out.
The President says he's a staunch free trader, but the White House gave numerous concessions to protectionist legislators in exchange for the votes needed in the House to restore Presidential "fast-track" trade-negotiating authority. If Bush offers concessions to domestic steel, textile, and farm interests in the coming months, the momentum for trade liberalization will come crashing to a halt. But if he pushes for a new round of global trade talks and a series of regional agreements, Bush will buck the conventional wisdom and give future historians something more to chew on. American business will certainly cheer.
Caring about Health Care
Bush hasn't fulfilled his campaign promise to give managed-care patients a greater say in their medical treatment. That means ending the Hill gridlock that has blocked final passage of a patients' bill of rights. It also means sitting down with the two key players in the Senate: his personal friend and sometimes political partner Edward Kennedy (D-Mass.) and sometimes-rival John McCain (R-Ariz.).
Finessing Entitlement Reform
In the 2000 campaign, Bush pledged to partially privatize Social Security and to provide prescription drugs for seniors as part of an overall restructuring of Medicare. The stock-market decline of 2000-01 has hurt the prospects for creating private accounts within Social Security. And the vanishing surplus means there isn't money for a new prescription-drug entitlement. The White House needs to come up with Plan B. Democrats are sure to return to the rhetoric of the past: Republicans are trying to take away benefits from seniors.
Because public attention has been focused on the war against terrorism, the President hasn't been hurt by Enron's collapse -- despite his close personal ties to Ken Lay, the company's CEO. Lay has long been the top contributor to Bush's political campaigns, and several top Administration officials were major Enron stockholders or consultants. In sheer scope, the Enron mess dwarfs the Whitewater scandal that set in motion the events that culminated in President Clinton's impeachment.
Remember, 2002 is an election year, so the Bush team could well face a grilling at high-profile committee hearings on the Enron fiasco in the Democratic-controlled Senate. The GOP House, however, is unlikely to probe the Bush-Enron links.
Control of Congress is up for grabs in November. House Republicans have benefited from favorable reapportionment and redistricting, but continuing economic woes could still tip the balance to the Democrats. The Dems, meanwhile, must protect a one-vote edge in the Senate. With Bush's remaining domestic agenda at stake, the President is likely to campaign aggressively in key swing states. It's back to the hustings for a President who was elected in 2000 without a plurality of the popular vote. But this will give him a chance to build support for reelection in 2004. Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views every Monday in Washington Watch, only on BusinessWeek Online