Second Bush Term Holds Many Unknowns For DC PR Pros

With the President and Congress back in town, public affairs firms across DC hope to ride the financial gravy train Bush’s aggressive legislative agenda presents.

His plans to revamp Social Security, overhaul the tax code, reform the legal system, promote energy independence, and other initiatives have firms scrambling for pieces of the consulting pies.

Look at the political landscape, though, and you’ll see more reasons why that gravy train may derail. A year from now, firms may lament the missed opportunities more than they savor their victories – however much my firm and others hope I’m wrong.

With a nod to Donald Rumsfeld, who once said, “There are known knowns… there are known unknowns… but there are also unknown unknowns,” let me suggest the “knowns,” “unknowns,” and “unknown unknowns” that could very well slow the train down.

Known knowns. At first look, Bush is well placed to get what he wants. Re-elected by a solid margin, he’ll claim a public mandate for his agenda – and he’s got bolstered GOP majorities in Congress to help enact his initiatives. But the fact is, his political power probably peaked on Election Day. As we’re already seeing, it’s all downhill from there.

Unable to run again, Bush is a “lame duck,” meaning that congressional Republicans will feel less compelled to hide their differences with him for the sake of party unity. That problem will only grow worse as high-profile senators like Bill Frist, John McCain, and Chuck Hagel prepare to run for President in 2008.

In that spirit, key Republicans are already voicing opposition to core elements of Bush proposals. The GOP, for instance, is deeply split over the President’s plans to revamp Social Security, with Senate Finance Committee Chairman Charles Grassley opposing Bush’s predisposition to borrow the $1 trillion or more in transition costs and Sen. Lindsay Graham actually proposing the very un-Republican idea of raising taxes to cover those costs.

More generally, one-party rule over the White House and Congress is less a guarantor of effective legislating than most think. Proud congressional committee chairmen often don’t like taking orders from a President of their own party. That explains why, for instance, a Democrat-controlled Congress gave President Clinton fits in 1993 and 1994, while Clinton got a surprising amount done with a GOP Congress starting in 1996.

The federal budget will also be a constraint. With the sky-high deficit helping to send the dollar sliding on currency markets, the Federal Reserve may have to raise interest rates to keep investors buying US securities. The fear of higher deficits, weaker dollars, and even higher interest rates may dissuade Congress from revamping Social Security or making Bush’s earlier tax cuts permanent (each of which would cost at least $1 trillion).

Perhaps the biggest constraint of all, however, is public opinion. After decades of government bashing by both parties, Americans are skeptical about bold schemes from DC. That explains why Clinton’s huge healthcare overhaul fell apart in 1994 and why Republicans lost support when they shut down the government a year later. If recent history is any guide, expect Congress to settle for modest change.

Known unknowns. A Supreme Court opening is coming: Chief Justice William Rehnquist is battling thyroid cancer; he and John Paul Stevens are in their eighties; all but one of the nine justices are at least 65; and Sandra Day O’Connor and Ruth Bader Ginsburg have had health problems. We don’t know precisely when the first vacancy will come. But when it does, nothing will threaten legislative progress more than the ensuing battle. Presuming Bush appoints a hard-core conservative in his own image, Republicans will do all they can to push the nomination through as Democrats do all they can to block it. Not only will the months-long battle divert attention from all other issues, but the outcome could poison the well for congressional cooperation on other Bush initiatives.

Unknown unknowns. It may be a coincidence, though I doubt it, but bad stuff tends to happen in second presidential terms – even if the seeds are planted in the first. Flush with a historic victory, a second-term President tends to over-reach, to suffer a bout of hubris, or merely to get careless.

Franklin Delano Roosevelt’s disastrous plan to “pack” the Supreme Court with more New Deal-friendly justices, Nixon’s Watergate scandal, Reagan’s Iran-Contra imbroglio, and Clinton’s dalliance with an intern – they all came to light during a second term.

What will happen in Bush’s second term? Who knows? But don’t be surprised when something does. And don’t be surprised, for the reasons cited above, if hopes for bold action turn into a pipe dream.

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