Bush's Wild Card In Election May Be Tax Cut

PRESIDENT Bush, smarting from criticism of his two-year-old decision to raise taxes, may call for new tax cuts in a dramatic move to invigorate his campaign against Democrat Bill Clinton.

The question being asked at the Republican National Convention here in Texas is: Can tax cuts help Mr. Bush patch back together the old Reagan coalition that crumbled in recent months?

Pounded by the recession and the breaking of his no-new-taxes pledge, Bush has struggled unsuccessfully to retain Ronald Reagan's powerful alliance of disgruntled Democrats and conservative Republicans.

In recent days, a few of those supporters have trickled back to Bush, but the pace is slow. With former Reaganites alienated in every region of the country, the president is still trailing Governor Clinton by at least 17 points (53 percent to 36 percent), according to the latest Newsweek poll.

Robert Mosbacher, chairman of the Bush-Quayle campaign, concedes that tax cuts are one of many options being considered by the Bush political team. Mr. Mosbacher, who served until this year as secretary of commerce, told a breakfast meeting of reporters here: "We'd all like to see it [tax cuts], but it has to be balanced with some government spending cuts. Otherwise we're just talking about adding to the deficit."

Tax-cut talk began over the weekend when Housing and Urban Development Secretary Jack Kemp predicted that Bush would call for lower taxes during this week's convention. And Secretary of State James Baker III, who moves to the White House as chief of staff in a few days, told employees at the State Department: "We should build on the fundamentals of lower tax rates."

Such a move would clearly delight conservative activists, the core of Reagan's support, who were infuriated when Bush reversed his famous 1988 convention pledge: "Read my lips, no new taxes."

Yet Bush's problems may run deeper. Jeffrey Bell, a Republican and author of a new book, "Populism and Elitism: Politics in the Age of Equality," says Bush's domestic policy and tax problems with Reaganites are exacerbated by the end of the cold war.

"When the Soviet coup failed, Bush was at 70 percent popularity," Mr. Bell recalls. But with the demise of communism, "the foreign-policy president was devalued. Nuclear war was no longer what people thought about, and attention turned to domestic issues. People asked Bush: What is your domestic program? And almost immediately Bush began to fall."

Also hurting Bush is his failure to tap the populist tide in American politics that Reagan understood so well, Bell says.

It is populists like Reagan who want to cut taxes (giving the people, not government, control over resources), privatize government services like education, reduce regulation, and cut short the terms of service in Congress.

Reagan was the most populist president since Andrew Jackson sat in the White House in the 1830s, Bell says. He had tremendous confidence in the American people, in their ability to solve problems, while being skeptical of government.

THOSE views served Reagan well. Reagan, like Bush, was confronted with a deep recession early in his term. But Reagan's cheerful optimism about the American people never left him.

"Ronald Reagan's confidence in people came through even though the people were upset and unemployment was high," Mr. Bell says. "Bush did not have that attitude. He acts puzzled by this down economic time, and he has not projected the kind of confidence that animates people."

A tax cut might help reverse that view of Bush. It would put him on the side of Reagan-style populism by indicating he has more confidence in people than government, in contrast to Clinton.

Political scientist James David Barber at Duke University cautions that it may take more than promises to patch up Bush's reputation. Dr. Barber cites a recent biography of Bush, "Marching in Place: The Status Quo Presidency of George Bush," by Michael Duffy and Dan Goodgame.

Following the 1988 election, when asked about the "sour" campaign against Democrat Michael Dukakis, Bush dismissed it completely, the authors observe. As they report: "That's history," he [Bush] said on the eve of his inauguration. "That doesn't mean anything anymore."

The question people now have a right to ask is whether Bush will really mean it when he promises things in the upcoming campaign, Barber suggests.

Political analyst Stephen Hess of the Brookings Institution notes one crucial difference between Bush and Reagan: "Bush looks at campaigning and governance as two entirely different things. I don't think Reagan did. He looked at governance as one four-year campaign."