Which is why there's a feeling in some Washington quarters that President-elect Bush and his team are getting too dire in their warnings that the economy is falling. The approach serves the interests of the new administration, Democrats say, not only because any downturn would be blamed on President Clinton, but because it bolsters the Bush team's argument for a $1.3 trillion tax cut.
Vice President-elect Dick Cheney sort of denied any such motivation Thursday during a visit to Congress, but also made it clear he does not like what he sees.
"We don't want to talk down the economy, clearly," he said after a 25-minute meeting with Sen. Joseph Lieberman, D-Conn., his former vice presidential foe.
Cheney, who will be Bush's chief congressional lobbyist for the tax cut next year, then quickly added, "There does seem to be a lot of evidence out there" that things are slowing.
"It's not just something that we're seeing," he said, "but a lot of evidence that, in fact, the economy has slowed down some. It was growing at a fairly rapid rate, on the order of 5 percent or better, and it's slowed."
But Democrats were skeptical about what was behind the gloomy talk. "They've been looking for a reason to do a tax cut for a long time," said Senate Minority Leader Thomas A. Daschle, D-S.D. "They may have seized upon the best one yet."
What is indisputable is that a number of recent economic gauges show the economy slowing – including new estimates Thursday of the gross domestic product (GDP), the value of the nation's goods and services. It grew 2.2 percent in the third quarter of 2000, its worst performance since 1996.
Cheney's meeting with Lieberman was the highlight of the quietest day in the Bush transition since it began a week ago. There were no major appointments, though Bush has reportedly settled on two more nominees – New Jersey Gov. Christine Todd Whitman as Environmental Protection Agency head, which is expected to be announced today, and Wisconsin Gov. Tommy Thompson as secretary of health and human services, expected next week – so the governor can take a long-planned Christmas vacation.
The topic on most official minds in Washington and Austin Thursday was the economy. The weaker GDP number is still growth, hardly even close to a recession, Clinton administration spokesmen pointed out. A recession is defined as two consecutive quarters in which the economy actually shrinks, something that has not happened in nearly 10 years.
That's why it's important to Clinton that he not go out on a sour economic note. At the moment, he is the first president in modern history who has presided over continuous growth.
And, said Clinton economic adviser Gene Sperling, that growth is likely to continue. Most economists see the economy expanding about 3 percent next year, still a healthy enough number to keep unemployment low. To criticize the economy – and perhaps worry investors – could become a self-fulfilling prophecy, Sperling said.
"It's important to be guarded and measured in what we say about the economy," said White House spokesman Jake Siewert. He said consumers and investors "take these comments very seriously, and it's important to try to instill a degree of confidence where it's appropriate."
Sperling went further, on ABC's "Good Morning America," saying the Bush and Cheney warnings send "a signal that [Bush is] willing to be political in describing the economy, instead of serious and disciplined and not political."
Bush spokesman Ari Fleischer said there was no political calculation. "It's very important to look long term, to think long term and to be forthright with the American people," he said.
But it's arguable that there is a political consideration. Successful recent presidents have tended to be those who get recessions, or at least economic slumps, over with early in their terms.
Ronald Reagan is the Republican model. Reagan instituted a 25 percent, three-year income tax rate cut to counteract the double-digit annual inflation and battered economy he inherited in 1981. Still, the country tumbled into its worst recession since the Great Depression, emerging early in 1983. By 1984, the economy was booming and Reagan cruised to re-election even though the tax cut helped lead to record federal deficits.
Many Washington policy-makers, including Federal Reserve Board Chairman Alan Greenspan, maintain that paying down the debt will stabilize the economy far more than a tax cut. Many congressional leaders, including House Speaker Dennis Hastert, maintain that a tax cut is best achieved in phases, which would, among other things, make it easier to pass. Other lawmakers have said they – and the economy – cannot swallow such a huge tax cut.
Lieberman and Cheney did not discuss the cut, but Lieberman has customarily been cautious. In 1999, he was one of the few Democrats urging no tax cut that year, and this year he joined with Vice President Gore in endorsing limited cuts aimed at low-income and middle-class workers.
The Lieberman-Cheney meeting in Lieberman's seventh-floor Capitol Hill office was, on the surface, a chance for two old friends to renew their acquaintance in a cordial setting. They have known each other for years. Lieberman sits on the Senate Armed Services Committee, and Cheney was defense secretary from 1989 to 1993. Lieberman was an important Democratic ally in those days when Cheney needed bipartisan support for the Persian Gulf War.
The two men will need each other again. Lieberman is the leading moderate voice in a Senate split 50-50, and Cheney will be breaking the ties.
Cheney made it clear Thursday he will be more involved than other vice presidents have been.
"President-elect Bush has asked me to take on special responsibilities with respect to the Congress," he said, "to be prepared to work both for the Senate and the House, in terms of working on legislation and legislative proposals. So I would expect to spend a fair amount of time up here."
There's another reason for Cheney's increased presence on Capitol Hill: Cheney, like Lieberman, has a gentle way of expressing his views without sounding threatening. Pressed on whether a recession is near, for instance, he said, "I think our views are similar to those that have been expressed by Chairman Greenspan.
"And we have an obligation as we get ready to take responsibility to make certain that we've got an accurate sense of where the economy is," Cheney said.
But it was also telling Thursday that Cheney and Lieberman did not discuss a tax cut. Instead, they talked about where they agree on education reform and national defense.
That illustrates why both sides must be careful in how to deal with a tax cut, said Scott Reed, a top Republican strategist.
"Bush and Cheney need to take the next month and analyze what they can and can't get done," Reed said. "They have to show some accomplishments in 90 days, and Congress has just as much on the line in 90 days."
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