Yes, there was the usual pomp and circumstance, the faux friendliness of Rep. Sheila Jackson Lee on the receiving line, the bobbing up and down of the president’s closest supporters, and the smattering of small but costly programs that have no constitutional justification in our federal government. Still, this 2003 State of the Union Speech by George W. Bush contained one of the most clearly stated and soundly reasoned agenda for economic freedom that any U.S. president has ever advanced.
President Bush stated right off the bat that the best way to expand the American economy is not to take too much of what Americans earn in taxes. He noted that tax cuts would leave money in the hands of those who earned, and who would spend or invest it (his emphasis on the latter word served as a rhetorical slap in the face of the clueless neo-Keynesians of both parties). He made the straightforward case for eliminating the punitive taxation of corporate dividends – profits distributed to shareholders have already been taxed once, and shouldn’t be again – while underlining the supply-side argument that balanced budgets will come only by turning the unemployed into employed taxpayers and by exercising “fiscal discipline“ in Washington.
Most welcome was the president’s decision not to retreat on perhaps his most important economic agenda item: market-based reforms of the two largest federal entitlements, Medicare and Social Security. His Medicare plan would use the promise of prescription-drug coverage as a lever to move the system towards a consumer-choice plan, based on defined contributions, and away from the current monopoly plan based on defined benefits that, given current trends, cannot be paid without massive tax hikes during the coming decade. On Social Security, he restated the case for giving workers the ability to own and control their own retirement accounts rather than being compelled to turn their savings over to politicians to squander.
The speech concluded strongly, with what I consider to be an effective case for the impending war in Iraq (visit NCAtWar for more on this aspect of the address), but I also liked the first half. George W. Bush is a war-time leader, but his domestic agenda is what will occupy most congressional deliberation in the coming year – and which may well determine his place in politics and history.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.