Do-Nothing Government?

Dec. 21, 2004

Gridlock is not guaranteed, although big tax cuts and big tax increases seem unlikely.

The 107th Congress convenes in 23 days. In 40 days, a new U.S. President will be inaugurated. And Washington, it's now widely expected, will be seized by political gridlock every bit as bad as the capital area's rush-hour traffic jams. Indeed, even as year-2000 Presidential ballots were being recounted in Florida three weeks ago, some people in Washington were already focusing on the 2002 Congressional races -- and the prospect of Democrats capturing the margins necessary to exert leadership. Coming out of a close and contentious election, "the next President will enter the office with no mandate," stresses Bruce Steinberg, chief economist at Merrill Lynch & Co., New York. And, he contends, at the other end of Pennsylvania Ave. from the White House, Senate Democrats "will have an effective veto over all initiatives" despite the prospect of nominal Republican majorities in both houses of Congress. "The crosscurrents of this election will make it more difficult for a new administration to lead and for consensus to be developed on Capitol Hill," agrees Jerry J. Jasinowski, president of the National Assn. of Manufacturers (NAM), Washington, and a Commerce Dept. assistant secretary in the Carter Administration. As a result, asserts Merrill Lynch's politically savvy Steinberg, both huge cuts in marginal income-tax rates and huge increases in spending -- such as a prescription-drug program -- are likely to fall by the wayside. What's more, Social Security reform "will likely fade or be booted to some bipartisan study commission," he believes. However, Michael E. Baroody is not among those embracing the general forecast of forthcoming government gridlock. It's "way too soon to know for a fact" that will be the outcome of last month's election, insists the NAM's senior vice president for public policy. Indeed, Baroody recalls that only a year ago, following the disruptive demonstrations at the World Trade Organization meeting in Seattle, the popular Washington wisdom was that permanent normal trade relations (PNTR) for China -- or any other kind of bipartisan trade legislation -- was dead for the foreseeable future. In fact, first the House and then the Senate approved PNTR this session by overwhelming majorities. "And one of the reasons . . . is that the business community put aside its occasional tendency to divide and conquer itself and really pulled together," says Baroody. "So the common wisdom is often wrong -- particularly if people with clear objectives and a sense of how to pull together decide not to accept the common wisdom." That's apparently how NAM will be positioning itself in 2001, with Jasinowski saying that "the business community looks forward to working with the Republican majority and pro-business Democrats in Congress to promote pro-growth policies that benefit everyone." Social Security, Medicare, education, and tax policy will top NAM's public-policy agenda. Meanwhile, the 2000 Presidential election has taken virtually no toll on David A. Wyss' expectations for the U.S. economy. Wyss, chief economist at Standard & Poor's DRI, Lexington, Mass., sees inflation-adjusted GDP growth averaging 3.7% during the next five years, inflation a remarkably low 2.2%, and the labor force growing 1.4% annually with a 4% unemployment rate at yearend 2005. "Overall, the U.S. economy shows few signs of the imbalances that would end this expansion," concludes Wyss. "DRI foresees continuing growth, albeit at a slower pace, for a few more years."

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.