RALEIGH – Republicans think that many things are going their way. President George W. Bush’s approval ratings remain in the mid-70s. Redistricting battles across the country have created few new opportunity districts for Democrats (though not very many for Republicans, either) and open up some possible gains in legislative seats, including in North Carolina.

I think what they are missing is the GOP’s lack of credibility on a number of key issues. Partisans are stressing the Republicans’ overwhelming advantage on national security and terrorism, but I am struggling to find an historical case in which a president’s party has gained in Congress due to his perceived expertise in managing foreign affairs or a war. Franklin Roosevelt, for example, nearly lost control of Congress during World War II. The Republicans did assume power, albeit briefly, after the war. Ditto in 1920. Ronald Reagan rebuilt the nation’s defenses and forced the Soviet Union to the bargaining table, and eventually to the dust heap of history. Yethis party lost control of the U.S. Senate.

I think Republicans will be competitive only if voters perceive them as more likely than Democrats to get the economy moving again. Right now , the GOP enjoys only a slim majority on this issue. If current trends continue, it may not last. The result would be a jarring surprise in the November elections.

Let’s face it: Bush has made a series of poor decisions on the economic front. His punitive tariffs on steel may have been a calculated move to win votes in West Virginia and Pennsylvania, but it has clearly hurt the economy elsewhere in the country by raising the price of materials to manufacturers. The president signed a bloated, unconscionable farm bill that he should have vetoed. His administration is not adequately fighting for spending cuts to minimize the budget deficit. And it isn’t proposing serious, immediate tax relief likely to restore entrepreneurial spirit and innovation to the economy, such as capital gains cuts or the elimination of double-taxation on corporate income.

The economic-stimulus bill the president did push included temporary tax cuts that, by their nature, are less effective in creating confidence among potential entrepreneurs that their risk-taking will be rewarded. The president appears to be listening to misguided advisors who tell him that if he tends to foreign affairs and prosecutes the war on terrorism, the domestic politics will take care of itself. That’s wrong. It never works that way. For swing voters, the economy is always an election issue. Recent stock market declines and continued weakness in regional economies like North Carolina create the risk of a backlash against the party in power – which, voters will perceive, is the Republican Party.

Bush and other Republicans should do what’s right, unleashing our free-market economy through lower taxes, lower levels of government spending, and less burdensome regulation. As a side benefit, their electoral prospects would improve.