Skip to comments.Cheney Exercising Muscle on Domestic Policies
Posted on 01/17/2005 8:13:50 PM PST by Pikamax
THE PARTY IN POWER Cheney Exercising Muscle on Domestic Policies By RICHARD W. STEVENSON and ELISABETH BUMILLER
ASHINGTON, Jan. 17 - Vice President Dick Cheney is playing a potentially pivotal role in shaping the Bush administration's ambitious domestic agenda, supporting larger personal investment accounts for Social Security than many other Republicans and helping gauge how the White House should proceed on Capitol Hill, administration officials and associates of Mr. Cheney say.
On issues like Social Security and overhauling the tax code, they say Mr. Cheney tends to mix an instinct for free-market conservatism with a pragmatic knack for vote counting, being the former House member that he is. Although Mr. Cheney is most identified in the public mind with foreign policy, he has also begun assertively rebutting administration critics on domestic issues, as he did in a speech last week on Social Security, while he works behind the scenes to hold together an increasingly fractious Republican Party.
As on Iraq and other foreign policy issues, Mr. Cheney's views on domestic matters tend to favor bold action even at the risk of short-term political backlash - what his critics would consider overreaching, reinforcing President Bush's own instincts. But even as he usually favors conservative approaches to whatever issue is under consideration, he also has a realistic streak honed by his keen sense of what members of his party on Capitol Hill are willing and able to push through Congress and deliver to Mr. Bush's desk, people who have discussed domestic issues with him say.
On Social Security, Mr. Cheney, in internal administration discussions, has been advocating that the personal accounts Mr. Bush wants to create within the retirement system be at the large end of what has been under consideration, a position likely to hearten many conservatives in Congress who also want to establish the biggest possible accounts, they say. But he has also been supportive of benefit cuts that some conservatives are telling the White House would be political suicide.
Mr. Cheney is going into the debate over how and whether to rewrite the tax code philosophically inclined to support a single-rate flat tax that would create incentives for more savings and investment, a position shared by many conservatives, Cheney associates say. But, drawing on his long experience as a member of Congress and his informal role as Mr. Bush's primary ambassador to Capitol Hill, he is aware that creating a new tax system might be politically unfeasible, they say, and would be supportive as well of taking steps to achieve the same incentives through changes to the existing progressive income tax system.
Mr. Cheney's supporters say he has no desire to elbow aside cabinet secretaries or run economic policy day to day. They say Mr. Bush relies on him to step back from the politics of the day and look at policy choices from all angles, considering long-term effects and unintended consequences. John W. Snow, the Treasury secretary, said Mr. Cheney considered himself "an extra set of helping hands."
But by all accounts, Mr. Cheney is deeply involved and discusses domestic policy with Mr. Bush at length.
"They spend significant time on these issues," said I. Lewis Libby Jr., the vice president's chief of staff. "They do discuss these issues with some specificity and detail."
Administration officials say Mr. Cheney sits in not only on nearly all policy discussions with Mr. Bush, but also some of those at lower levels, and he has lunch each Wednesday with the senior members of the administration's economic team to stay on top of things. He is the White House's main pipeline to Alan Greenspan, the Federal Reserve chairman, a friend since they both worked together in the Ford administration in the mid-1970's and someone whose support the administration needs for much of its agenda. Mr. Cheney is "involved in everything," said Andrew H. Card Jr., the White House chief of staff.
Through his close ties to Republican lawmakers, especially in the House, he plays a central role in setting and carrying out the White House's legislative strategy on domestic matters - a role that could be especially vital this year, given the reluctance of many Congressional Republicans to embrace changes to Social Security.
"When it comes to the art of the feasible, the art of the possible, he is one of the best legislative heads and best political heads in the country," Mr. Snow said.
Mr. Cheney wields considerable influence over personnel issues, and late last year quietly helped shop around for a possible replacement for Mr. Snow before Mr. Bush decided to keep him on for the start of his second term, Republicans familiar with the situation said.
He has his own domestic policy staff, and consults frequently with outside economists. Most of all, he has Mr. Bush's ear, and often gets in the last word after all the president's other advisers have had their say.
"The way he influences the process depends on the issue and his interest in it," said Cesar V. Conda, who was Mr. Cheney's assistant for domestic policy for the first three years of the administration and is now a lobbyist in Washington. "The most obvious way is he talks directly to the president."
In a White House that is still sensitive to any suggestion that the vice president is the puppet master, colleagues and supporters dismiss any suggestion that Mr. Cheney is calling the shots or that he is the de facto Treasury secretary.
"He is a policy player," Mr. Card said, adding, "He is not the penultimate player" in decision making.
But there is little doubt that, by dint of the trust Mr. Bush puts in him, the experience and expertise he brings to many domestic issues and the sheer force of his personality that Mr. Cheney is more than just another adviser. Since 1969, Mr. Cheney has been a White House staff member and chief of staff, a member of Congress, defense secretary, chief executive of Halliburton and, as of Thursday, a two-term vice president.
"It's hard to think of any vice president who brings to the table the enormous wealth of experience that Dick Cheney has had," said Lawrence B. Lindsey, who was director of the White House's national economic council during Mr. Bush's first two years in office.
Already, associates of the vice president say, he is flexing his muscles on Mr. Bush's top domestic priority, remaking the Social Security system to include personal investment accounts.
Mr. Cheney is said by associates to favor creating investment accounts into which workers could deposit 4 percent to 6 percent of their earnings that are subject to the Social Security payroll tax. That position puts him firmly in the camp counseling a more bolder approach than many other Republicans are contemplating. And after months of signals that Mr. Bush is likely to embrace accounts of a more modest size, it suggests there is less consensus within the White House about how to proceed than is widely presumed in Washington. But unlike many other proponents of large-scale private accounts, Mr. Cheney tends to favor coupling the creation of personal accounts with reductions in the scheduled government-paid benefit for future retirees, people who are familiar with his thinking say. They say he leans toward supporting a proposal already floated by the White House to alter the formula by which initial benefit levels for retirees are set from one based on the growth of wages throughout the economy to one based on increases in prices; since wages tend to grow faster than prices, the effect would be a substantial reduction in the guaranteed benefit relative to what is promised by current law.
As he is on national security matters, Mr. Cheney is a professional worrier when it comes to the economy. In December 2000, he accurately warned of the impending recession at a time when conventional wisdom held that business conditions were still reasonably good. Over the past few years he was a major voice within the White House in calling for accelerating and expanding tax cuts, in part because of concern that the recovery had not fully taken hold, current and former administration officials and outside advisers say.
Despite his reputation in recent years for exerting his influence primarily on post-Sept. 11 foreign policy, helping to manage domestic policy is in many ways the more natural outgrowth of his background.
Once a candidate for a doctorate in political science, he went on to serve in several economic policy positions in the Nixon administration and became chief of staff in the Ford White House. During that time, friends say, he was scarred by what he considered one of the great policy mistakes of recent history, the imposition by President Richard M. Nixon of wage and price controls, a step that flew in the face of the conservative belief in free markets.
Over dinner one night in the mid-1970's, he watched Arthur B. Laffer, one of the earliest proponents of supply-side economics, sketch on a napkin a curve showing that, beyond a certain point, higher tax rates generate diminishing amounts of revenue by reducing incentives to work and invest.
It was one moment in the introduction to Washington of a new way of thinking about tax policy, and as with many Republicans of the time, Mr. Cheney became increasingly convinced in the late 1970's and early 1980's that lower taxes were the answer to unleashing the economy's potential for growth.
As a member of Congress from Wyoming from 1979 to 1989, he aligned himself with economic conservatives. In 1986, he even voted against the streamlining of the tax system championed by President Ronald Reagan, judging it not to do enough to promote economic growth even though it closed loopholes and lowered tax rates.
"He's predominantly a free-market thinker," said Lawrence Kudlow, a conservative economist and broadcaster who has met regularly with the vice president to discuss the economy and policy. "He's always had a record of being a deregulator and a tax cutter. I wouldn't call him a supply sider, but he has some supply-side instincts."
In late 2002, Mr. Cheney was instrumental in the firing of Paul H. O'Neill as Treasury secretary. At the time, Mr. O'Neill was suggesting that the economy was relatively healthy and that the administration needed to turn its focus to the budget deficit and the government's long-term financial condition. Mr. Cheney, by contrast, saw the economy at the time as still struggling, and was eager to give it a jolt through additional tax cuts, even at the expense of increasing the deficit, people who were involved in the deliberations said.
Within the administration, they said, there was a raging debate during that period about whether to call for accelerating the scheduled reductions in all personal income tax rates, or just those for the lower tax brackets. Along with Mr. Lindsey and several others, Mr. Cheney backed accelerating all the rate cuts, even if it exposed Mr. Bush to criticism that the move would unduly favor the wealthy, they said.
Mr. Cheney's stance, they said, was a major factor in Mr. Bush's final decision to call for cutting all the income tax rates immediately, as well as in the president's call as part of the same proposal in early 2003 to eliminate taxation of corporate dividends. Much of what Mr. Bush proposed ultimately became law.
While Mr. Cheney's influence within the White House is considerable, he continues with his minimalist approach to public appearances, even when he takes on the classic vice-presidential role of attacking the administration's critics. There were no White House banners, slogans or music at the Social Security speech that Mr. Cheney gave on Thursday at Catholic University in Washington. Mr. Cheney simply walked to the podium, briefly thanked the university, dispensed with any warm-up jokes or anecdotes and went straight to the text of his speech.
He delivered his remarks in a monotone - even when he predicted "fiscal collapse" for Social Security if something was not done - finished within 15 minutes, then left the room without any handshaking or back-slapping.
"He delivered his remarks in a monotone - even when he predicted "fiscal collapse" for Social Security if something was not done - finished within 15 minutes, then left the room without any handshaking or back-slapping."
Just the facts, Ma'am.
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