Jewish World Review Dec. 26, 2001 / 11 Teves 5762
Reagan's defense and foreign policies hastened the downfall of communism. Bush is dedicated to defeating world terrorism, and his first endeavor in Afghanistan has been successful, though there is much left to be done.
Reagan also restored America's morale and, ironically, its confidence in government after the failures of the Carter administration. Likewise, Bush, responding forcefully to the Sept. 11 terrorist attacks, has embodied a resurgence of patriotism and public generosity.
Unlike Reagan, Bush inherited a healthy economy and a budget in surplus. He's not responsible for the 2001 recession any more than Reagan was the deeper recession of 1981Ð82.
But their fiscal strategies are similar, as both fought for and won major tax cuts designed to stimulate the economy and choke off major new spending initiatives.
Reagan did bring about an economic resurgence, but also budget deficits as far as the eye could see. New projections due in January are likely to suggest that, under Bush, the 10-year budget surplus will fall from $5.6 trillion to $2 trillion or less.
Sixty percent of the decline results from the recession, the September attacks, a reduction in tax receipts and increased spending. The other 40 percent results from the Bush tax cut.
Not only will those numbers block spending on major new initiatives, such as a prescription drug benefit for seniors, health coverage for the uninsured and privatization of Social Security, but they may also slow economic growth.
A new study by the Democratic staff of the House Budget Committee shows that while the Federal Reserve Board has cut short-term interest rates 11 times in recent months, long-term rates have not fallen in tandem.
The short-term federal funds rate has fallen by 4.75 percent to a mere 1.75 percent, according to the report, while the long-term AAA corporate bond rate has dropped only .5 percent to 7.1 percent.
The small long-term decline is a sign that financial markets expect that the government will have to borrow. High long-term rates make it harder for corporations to borrow money for new equipment, become more productive and lift the economy out of the doldrums.
On the foreign policy front, both Reagan and Bush were at first dismissed in the European press as "cowboys" and could count on support only from British prime ministers. Later, though, each became appreciated for exerting world leadership.
Reagan's moment of truth came in the 1984 German elections, conducted over the issue of basing U.S. intermediate-range missiles to counter Soviet missiles deployed in Europe. When Germany sided with Reagan, the Soviet Union decided it had to negotiate with the United States.
Ultimately, Reagan's pressure on the Soviet military - in Afghanistan and on the strategic arms front - led Soviet leaders to conclude they had to reform the communist system. It could not change; thus the "evil empire" collapsed.
Although Reagan came to office with the goal of fighting communism, Bush did not plan for a war on terrorism to define his administration. In fact, he was no more aggressive in chasing Osama bin Laden during his first nine months in office than was his predecessor, Bill Clinton.
But now Bush has made fighting terrorism the purpose of his presidency. He has robbed bin Laden of his haven in Afghanistan, though the al Qaeda mastermind himself is still at large - possibly to become like an evil Elvis, the subject of unverified sightings for a long time to come.
"What comes next?" is topic A as 2001 winds down. Even though it once seemed likely that the answer would be Saddam Hussein, the conventional wisdom has turned to low-hanging fruit - i.e., Islamic terrorist cells in Somalia, the Philippines and the Sudan.
Also on the agenda are Hamas and the Palestinian Islamic Jihad, which are being targeted by Israel, the United States and, possibly, Palestinian leader Yasser Arafat.
It would not be surprising if Palestinian groups, which used to carry out a majority of the world's serious terrorism, tried again to attack American targets to force a breach in the U.S.-Israeli alliance. That strategy's not likely to succeed.
Iraq's Hussein may not be the next U.S. target, but he needs to be neutralized - preferably ousted from power - before Bush can claim that he has ended the threat of attack by weapons of mass destruction.
Politically, Bush is far ahead of where Reagan was at this point in his presidency. Reagan's approval rating rose to a high of 68 percent in May 1981, a month after he was shot. However, that figure slid to 49 percent by the end of his first year in office.
Bush's approval rating is at 84 percent, the highest of any recent president 11 months after his swearing-in. But the iron rule of politics seems to be that, regardless of a commander in chief's popularity, his party loses seats in the first mid-term elections after he enters the Oval Office.
In 1982, under Reagan, Democrats picked up 26 House seats, while Republicans gained one in the Senate. Reagan, of course, went on to win a landslide re-election victory in 1984. Bush can only hope to match that precedent.