Bush credibility on the line with tax cuts

Sometimes low expectations can be a blessing.

That's definitely the case with President-elect George W. Bush and
the tax issue. Despite the fact that he actively campaigned for an
across-the-board tax cut, most Americans aren't counting on him to
deliver. During the campaign, Rasmussen Research found that only 41
percent of Americans believe a president who wants to cut taxes will
actually be able to convince Congress to go along with him and deliver a
tax cut.

Even when we asked voters to assume that Bush would be our next
president and Republicans would control both the House and Senate, most
voters still said that tax cuts would not be delivered. Overall, during
Campaign 2000, we found that seven out of 10 voters want federal taxes
and spending to go down over the next five years. At the same time,
seven out of 10 expect that federal taxes and spending will actually go
up during that same period.

Obviously, part of the reason for this skepticism about tax cuts is
generic skepticism about politics and politicians. For the
president-elect, there's also the issue of his father's broken tax
pledge.

With expectations so low, if Bush delivers on this campaign promise,
he'll be ahead of the game. In fact, since expectations are so low, it's
not necessary for Bush to deliver on his particular tax-cut proposal.
Almost any noticeable tax cut will exceed expectations and create the
impression that he delivered on a popular campaign promise.

The rhetoric coming from the transition office suggests that the
president-elect understands both the skepticism and the importance of
this issue. It is also clear that Bush and his advisers are building an
even stronger political case for the cut.

This is most evident in all the talk about a slowing economy. In the
public mind, this slowdown is very real. Confidence in the economy has
dimmed in recent months and expectations of a recession have grown to
their highest level in more than three years.

The voters are also quite prepared to accept tax cuts as part of the
mix to get the economy moving again. Most voters (54 percent) say
cutting taxes is good for the economy. Only 13 percent say tax cuts are
bad from an economic perspective, while 17 percent say they have no
impact. Government spending cuts are also seen as good for the economy
by a 41 percent to 26 percent margin.

Because the public is so receptive to tax cuts, we can be sure to see
a blizzard of polls trying to change the debate. Many will ask whether
the federal budget surplus should be "spent" on tax cuts, paying down
the federal debt, or shoring up Social Security. Undoubtedly, many will
show that tax cuts are less popular than other items on the list.

However, such findings do not mean voters are opposed to tax cuts.

First, the questions are misleading because they don't accurately
reflect the way that voters view the surplus. Most say that there is no
surplus to distribute until Social Security, Medicare, and other vital
programs have been fully funded. In other words, the "surplus" can't be
used to shore up Social Security because until Social Security is
solvent, there is no surplus.

Also, voters are quite willing to consider programs that cut taxes
and improve confidence in the Social Security program. Proposals
that give workers a choice about how to invest some of their own Social
Security payments for their own retirement are supported by a solid
majority of voters. In other words, voters don't believe that simply
sending more money to Washington will restore the Security in Social
Security.

As a result, voters are defining a pragmatic middle ground -- no tax
cuts that will imperil existing funding commitments; but no new
government programs that will imperil the tax cut.

For President-elect Bush, the message from all this is his
credibility is on the line. Fortunately for him, the expectations are
low and the upside potential is huge.