After four years of dramatic foreign policy ventures, President Bush has turned his attention to domestic policy, seeking to leave historic stamps on the graduated tax code, the health care system and Social Security, all hallmarks of Democratic rule.
But standing in his way are budget deficits that are, in part, his creation, Democrats bitter over a divisive campaign and the vagueness of his campaign rhetoric.
"It is true the president talked about these things incessantly, but it's like talking about mom and apple pie: Who's opposed to Social Security reform as long as they can imagine whatever they want to think that is?" asked Bruce Bartlett, a conservative economist with the National Center for Policy Analysis. "These are big, controversial issues, and in spite of the Republican majorities [in Congress], you can't ram things like this down people's throats. You have to explain what you're trying to do."
Bush made clear Thursday that he would aggressively pursue adding private investment accounts to Social Security, simplifying the tax code and limiting civil lawsuits. Also on the agenda are expanding domestic energy production, reducing environmental regulations and sweetening tax breaks for individual health insurance policies.
"He wants to be the Republican FDR," said Michael D. Tanner, a Social Security analyst at the Cato Institute, referring to Democratic President Franklin Delano Roosevelt. Roosevelt's New Deal policies were adopted in the 1930s to advance economic recovery and social welfare.
All of these upcoming domestic initiatives come against a backdrop of war in Iraq, continued fighting in Afghanistan and tensions around the globe, all costly. The Pentagon is expected to seek an additional $70 billion for Iraqi combat operations early next year, while the transitional costs of a partially privatized Social Security system may range from $100 billion to $150 billion a year for decades. Under those circumstances, Bush could end up not like FDR but like Lyndon B. Johnson, who pursued the guns of Vietnam along with the butter of his war on poverty -- with troublesome economic results.
Each of the issues received consideration in Bush's first term, as well as an airing on the campaign trail. But in most cases, Bush presented only gauzy applause lines, such as allowing younger workers control of some of their Social Security taxes, making the tax code simpler and fairer, and giving people more control over their health care.
Now, he faces the challenge of turning ideas into legislative reality -- and presenting the costs as well as the benefits.
Bush has shied away from such fights before. In November 2001, when he was at the height of his power and popularity, his top economist presented him options for changing Social Security, the benefits and the inevitable costs -- either for beneficiaries who would face cuts, or for the nation, which would face crippling deficits if those cuts were not imposed.
Presented those options, Bush blanched, and the issue slipped into dormancy, as he mobilized the country for war and focused on tax cutting. Now, he is preparing for a fight as he considers his domestic legacy, White House officials say.
"I earned capital in the campaign, political capital," he said Thursday. "And now I intend to spend it."
The legislative road looks long. Bush was not hiding the details of his plans for Social Security and taxes from voters, White House officials and advisers said. They do not exist yet.
With the tax cuts of 2001 and 2003, Bush dictated which taxes to cut and how deeply. With the restructuring of the nation's intelligence apparatus, the White House drafted legislative language. In the case of a prescription drug benefit for Medicare, Bush sent up only a vague set of principles. As for the second-term agenda, White House spokeswoman Claire Buchan said: "We don't know yet. We will talk with members of Congress and others to determine the best way to proceed."
Rep. Charles W. Stenholm (Tex.), perhaps the president's most vocal Democratic supporter on Social Security reform, recalled meeting with Bush's Social Security advisers three months ago. To his surprise, they were not there to explain where Bush was going on the issue but to hear how Stenholm planned to proceed. "It's just been amazing to me," he said. "In four years, there's been so little done at any level, planning for Social Security reform."
After that meeting, Bush and Vice President Cheney personally campaigned for Stenholm's defeat in a redrawn, newly Republican-leaning district. Even Republicans say Stenholm's loss may be Bush's, as he seeks bipartisanship on Social Security. "I hated to lose Charlie," said Rep. Jim DeMint (R-S.C.), a champion of fundamental changes in tax policy as well as Social Security private accounts who was just elected to the Senate.
Some of the domestic agenda has been laid out in detail, because the administration was pursuing it during the first term. Bush's top environmental officials said they planned to focus on the policies they had pushed in the past few years, which have been largely hailed by industry as pragmatic and attacked by activists as damaging.
Within months, Environmental Protection Agency Administrator Mike Leavitt is planning to issue rules curbing the emissions of sulfur dioxide and nitrogen oxide from power plants in 28 eastern and midwestern states, a proposal restricting mercury pollution from power plants and a regulation setting a stricter standard for fine particle pollution that states must meet. "The mission the president has given me is to increase the velocity of environmental progress -- but do it in a way that maintains our environmental competitiveness," Leavitt said Friday.
In all three cases, environmentalists say the government could go further in curbing pollution from industrial sources.
But on the twin centerpieces of his domestic agenda -- Social Security and tax policy -- much of Washington has been left guessing. This tack -- ambitious ideas with no substantive details -- has sparked concern among some Bush allies and skepticism among independent observers that little will be accomplished.
"The president either has to come up with a specific bill or a very detailed plan," said Rep. Jim Kolbe (R-Ariz.), one of Bush's strongest allies on the partial privatization of Social Security. "A couple of generalities is not going to do it."
Richard Berner, chief U.S. economist at Morgan Stanley, told clients Friday he saw "serious conflicts among the proposals." Simplifying the tax code seems opposed to making the first-term tax cuts and new deductions, such as the $1,000-per-child tax credit, permanent, he said. If such tax breaks are made permanent, he added, it will be far more difficult to lower broad tax rates or implement a national sales tax.
Moreover, record budget deficits created in part by five tax cuts in four years will make it considerably harder to enact an expensive restructuring of Social Security. "Absent other changes to reduce today's sizable deficits and with little time to articulate and sell the details of these proposals, they seem collectively unlikely to pass," Berner concluded.
In his favor, Bush has a slightly larger GOP majority in the House, a considerably larger majority in the Senate and a new crop of conservative senators who championed these issues long before Bush did. But few are under any illusions about the difficulties facing the president. With the budget deficit already at $413 billion, the addition of private investment accounts to Social Security will mean much more government borrowing.
The commission Bush established on Social Security presented three options in December 2001, none of which he would endorse. But the second of those options has received attention at the White House, especially with Bush's Council of Economic Advisers. That option would allow most workers to invest about one-third of their share of Social Security taxes as they choose, but it would also slow the growth of benefits by tying annual increases to inflation instead of the faster growth of wages. It would cost as much as $1.5 trillion over the first 10 years, according to the nonpartisan Congressional Budget Office.
"It's all nice to propose personal accounts, but then you've got to make the tough choices," Kolbe warned. "You have to accept the short-term transition costs that are going to hit the budget deficit. It's just a matter of being responsible."
To borrow that sum on top of the current deficit would run considerable risk, said Peter R. Orszag, an economist at the Brookings Institution. If international lenders grew tired of U.S. government debt, interest rates could shoot higher, the value of the dollar could decline sharply, and all Americans could face an erosion of their standard of living.
On taxes, Bush has been even more vague. Beyond promising to make the tax code simpler and fairer, he has given only hints that have become a Rorschach test for tax policymakers in Washington.
"At this point, you can imagine infinite variations of tax reform," Bartlett said. "How can you even begin to have a dialogue, do a discussion or have an analysis without more detail?"
Staff writer Juliet Eilperin contributed to this report.