Slump complicates Bush's job
A stalled economy is likely to make it harder for the new president to carry out his agenda, including big tax cut.
New presidents often face worrisome challenges early in their tenure - and George W. Bush is no exception.
The sudden stall of the US economy - including a plummeting stock market and rising energy costs - may well undermine the new president's ability to push through his own carefully executed agenda. More important, it could eventually force him to alter his plans, including policy cornerstones such as a big tax cut, a partially privatized Social Security system, and an expensive national missile-defense shield.
Depending on the severity of the downturn, Mr. Bush could even end up joining the company of one-term presidents rejected by voters because a recession took place under their watch.
"If the economy goes south and the administration handles it badly, it could permanently damage the Bush administration," says presidential scholar John Kessel, at Ohio State University.
Democrats are already blaming the administration for "talking down" the economy by mentioning the "R" word as far back as December, when unemployment was a low 4 percent and economic growth for the quarter still a positive 1.1 percent - though steeply down from previous quarters. They assert that Mr. Bush tried to capitalize on fears of a recession to sell his tax cut.
The administration maintains it is just being realistic, calling it like it is. But today's economic trouble could spill over into other areas.
Take Bush's hopes of privatizing part of the Social Security system, allowing some workers to invest a portion of their earnings in the markets. Given the recent jolts investors have experienced, "he moves forward with the privatization scheme at his own peril," says Robert Reischauer, former director of the Congressional Budget Office.