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Bush: Good Timing for Bad News

Will California’s energy woes make a tax cut easier to pass than expected?

January 24, 2001

Will California's energy woes make a tax cut easier to pass than expected?

Where others — like Jimmy Carter — before him would have seen calamity, the 43rd President of the United States and his advisors spot tremendous opportunities. On both the overall economy and the energy sector, what appear to be formidable problems could turn out to be major strokes of luck for the new administration.

The reason is quite simple: At the very top of President Bush’s agenda are two items — major tax cuts and increased domestic energy exploration — that will become much easier to implement in the current political environment.

To put it differently, tax cuts are easy to sell to a previously skeptic public when one can argue that they will boost the cooling economy. Likewise, opponents of new oil exploration in the United States, in such places as Alaska’s Arctic National Wildlife Refuge, will have a hard time making their case. After all, hundreds of thousands of Californians are presently sitting in the dark or are waiting in long lines to buy expensive (by American standards) gasoline.

The one place where these insights will ring especially true is California, a Democratic bastion where then-Governor George W. Bush only got 42% of the vote compared to Al Gore’s 54%.

Maybe those Californians who voted against the new President because they did not like his stance on the environment may now reconsider as they are sitting in front of dark television sets or are clearing out spoiled food from their room-temperature refrigerators.

And even a core group of Democratic partisans, the Hollywood movie crowd, might — at least for a while — mute their criticism of the new administration. Otherwise, they might appear too out of touch with the plight of their fellow Californians.

After all, California’s first week of blackouts alone cost the state almost $1.7 billion in wages, sales, and productivity, according to the Los Angeles County Economic Development Corporation. The crisis has forced some companies to lay off workers and shift production to factories in other states where power has not been affected.

So President Bush can consider himself lucky: The timing of the economic cool-down and California’s power woes couldn’t be better for him to pitch his ideas on tax cuts and oil drilling. In a sense, Mr. Bush’s ambitious proposals for privatizing investments in Social Security and for private school vouchers could also get a boost from a similar crisis environment.

Then again, with the Social Security program projected to be insolvent in just a few more decades and with U.S. school students scoring abysmally on international tests, maybe the crises for issues are also already in hand.