Last Chance

The Bush administration woke up yesterday morning to a deeply ugly political situation. Those polls that show the president below 40% approval? They would look even worse if they surveyed only Republican members of Congress. As for the president's opponents: They are slavering for a nice two-year-long munch on the administration's haunches.

Worst of all, the administration seems to have exhausted its energy. Frustrated by Iraq, wounded by Katrina, thwarted in its two most recent major domestic initiatives (Social Security and immigration), the administration looks baffled, uncertain and often strangely passive.

But President Bush can yet regain the initiative. His opponents in Congress are badly divided amongst themselves: Witness Nancy Pelosi's attempt last spring to engineer the ouster of her own No. 2, Steny Hoyer, in favor of John Murtha.

Mr. Bush's Democratic opponents are also burdened with a very visible extremist wing. There is a real possibility that Alcee Hastings will be named chairman of the extremely important Intelligence Committee--he of course being the Florida ex-judge impeached and removed in 1989 on corruption charges. The Democrats are also haunted by gnawing fears that crucial segments of the American electorate distrust them as cultural aliens and foreign-policy weaklings, as demonstrated by the panicked Democratic reaction to John Kerry's inadvertent slur against the troops in Iraq.

With a little ingenuity, the Bush administration could take advantage of these weaknesses--and make yesterday's defeat work to its own advantage. President Bush should prepare to bombard Congress and the media with new ideas and proposals that rally his own party, divide his opponents and drive a wedge between left-wing Democrats and the voting public. So long as he is acting, he forces Congress to react.

The president's critics complain that the administration has lacked accomplishments over these past two years. The new Congress offers an opportunity to prove that Republicans remain the party of ideas--and that their opponents still lack them. The nomination of Robert Gates to replace Donald Rumsfeld as secretary of defense offers a new start. The serene and knowledgeable Mr. Gates is in for a grilling, but by standing his ground and insisting on the importance of succeeding in Iraq, he can expose to the TV-watching public the real beliefs and purposes of left-leaning Democrats like Carl Levin.

At home, the administration should seek less to pass legislation--although legislative success is always welcome--than to clarify the differences between the parties for 2008. For instance: The president talked vaguely in 2005 of a grand new tax reform, but never gave enough detail to interest anybody in his ideas. What he had in mind, of course, was a shift away from taxing work, savings and investment toward taxing consumption. Good idea, but awfully abstract. The next Congress offers an opportunity to make it clear what this reform means.

President Bush has repeatedly asked Congress to make permanent his cuts in the income, dividend, estate and capital-gains taxes, as well as his doubling of the child tax credit. Congress has hesitated, citing fears of the impact of permanent tax cuts on the U.S. fiscal balance. These cuts constitute the most valuable element of Mr. Bush's domestic legacy. It's worth fighting to remind the country that Democrats would allow the president's tax relief to lapse--and that if Democrats are allowed to return to power, taxes will shoot back up in 2010.

The president should send Congress a tax-reform proposal now, shaping it so that it appeals to enough Democrats to split the opposition. Here's one way to do that: Democrats have made a great theme of "energy independence." The president has likewise denounced America's "addiction to oil" and often presented nuclear power as a crucial element of an ideal energy policy. What if he baited the Democrats with some kind of energy tax (or, better, a carbon tax--which exempts nuclear-generated energy) in exchange for permanent cuts in taxes on work, savings and investment. "Tax waste, not work" is not a bad slogan.

The Congressional Budget Office has estimated that a carbon tax that began at $12 per ton emitted and rose gradually to $17 would raise $208 billion over 10 years. That's enough to fully compensate for the cost to the Treasury of making permanent the president's cuts to taxes on capital gains and dividends--and leave over almost $40 billion to balance the budget.

Education reform offers another opportunity for the administration to display energy and highlight opponents' divisions. The testing system instituted by the No Child Left Behind law will soon begin delivering its five-year report cards. Many American schools will be rated as failing--and very likely the majority of these schools will be found in Democratic congressional districts. Over the past five years--and over the 20 years before that--hundreds of billions of dollars have been poured into America's worst schools, without discernible improvement.

George Bush entered politics as an educational reformer. Now, he can return to the good fight by scooping an idea from an opponent. Former Labor Secretary Robert Reich has proposed a voucher system that would grant progressively larger vouchers to children from poorer families. Given how much taxpayers already pay to support the nation's worst schools--the District of Columbia spends more per child than any other jurisdiction--Mr. Reich's idea might even save money. But it would certainly put the cat among the Democratic pigeons, especially if the president recruited Mr. Reich to lobby for it.

Democrats have effectively used ethics as a political lever against Republicans. With the election behind them, they will surely welcome the chance to transform their slogans into reality. The president might take the lead in calling for a voluntary ban on lobbyist-paid travel by members of Congress. And since we should want to encourage members of Congress to travel abroad, the president should propose a formal congressional travel fund. Make the fund big--at least double what is being spent now--and propose a special joint House-Senate subcommittee to oversee it based on the principle: oversight yes, golf no.

Over the next two years, executive energy must be more than a doctrine. It may prove the key to Republican survival--and the coming conservative resurgence.