Bush was also keenly aware that his father had failed to capitalize on the success of the Gulf War and on the huge surge of public support that accompanied it. The economy weakened in the months following that war, and it dragged down Bush 41’s hopes for a second term. In Bush 43’s case, as the economy limped through 2002, its sluggishness was seen as a major threat, in both policy and political terms. And Bush and Rove were determined not to repeat the fate of Bush 41. So it came as no surprise that Bush dumped his economic team soon after the midterm congressional elections and installed a new team.
The job of these new economic appointments was to trumpet the message of economic growth. The Bush Team believes strongly in the power of positive rhetoric for shoring up the economy—that confidence will help spur investment and stimulate spending. In addition, the new appointments were to help frame and sell the stimulus plan Bush assembled for early 2003.
Bush faced enormous pressure from his conservative flank to impose quick tax cuts to spur economic growth. Supply siders believed that Ronald Reagan’s tax cuts had helped spur the economy during the 1980s, and that by draining tax revenue from the system, he had curbed the growth of government spending. These supply siders wanted big and immediate tax cuts. In contrast, moderates were convinced that the projections of large deficits that would balloon in the future demanded a retreat from tax cuts toward a balanced budget.
Bush took a surprising middle ground. The 2001 tax cuts were temporary, scheduled to expire in 10 years. He argued that the cuts ought to be made permanent. It was a long-term strategy that looked past the short-term demands of the supply siders and the budget-balancing fears of the moderates. The president pushed permanent repeal of the estate tax, a longtime favorite of conservatives. He remained ready to pump more money into the economy if it showed further sluggishness—and to adopt (and take credit for) Democratic ideas if the tactics suggested it was the right move. In 2002, the polls gave Bush more credit for steering the economy than the Democrats, and he was determined to keep it that way.