17 November 2004

Economists hand Bush laundry list

President Bush and 55 journalists who participated in a The Wall Street Journal poll have different priorities for the U.S. economic agenda.

The Wall Street Journal reported Bush is putting an overhaul of the nation's tax code and reform of Social Security at the top of his to-do list.

According to the economists who participated in The Wall Street Journal Online's November economic forecasting survey, along with tackling Social Security's ills the president should be placing equal emphasis on reducing what more than half of them agree is the biggest economic challenge facing his administration: the government's yawning budget deficit.

The U.S. budget deficit reached $413 billion in the fiscal year ending 30 September, equal to 3.6% of gross domestic product. (GDP is the total value of all goods and services produced in the economy.) The economists expect the Bush administration to make progress on reducing the gap: They predict the deficit will shrink to 3.1% of GDP by the end of fiscal 2005 and to 2.5% in 2008.

But the economists caution that the deficit is likely to be a persistent long-term problem and they don't expect the president to have as much success in dealing with the deficit as he will have in addressing other economic issues.

Ranked To-Do List

1) Budget deficit
2) Social Security
3) Health care
4) Tax-code reforms
5) The trade deficit [tie]
6) The job market [tie]
7) High oil prices
8) The dollar's weakness

Ranked List of Likely Success

1) Tax-code reforms
2) The job market
3) High oil prices
4) Social Security
5) Budget deficit
6) The dollar's weakness
7) Health care
8) Trade deficit

In the survey, the economists received a list of eight major economic problems facing Bush as he begins his second term and their task was to prioritize the list—sorting it to show which issues should get the most attention. Narrowing the budget deficit and tackling reforms of the Social Security system came in at the top of their to-do lists for the president. Addressing high crude-oil prices and weakness in the dollar were at the bottom.

The economists were then asked to re-sort their lists to indicate the issues where they felt Bush would have the greatest success. Reforming the tax code and reviving the job market were at the top. Social Security fell to the fourth spot, and taming the deficit was fifth among the eight issues.