The economics of George W. Bush may be broadly described as lukewarm Reaganomics, but his plans for regressive tax cutting and more dismantling of the public sphere are airbrushed with the same touchy-feely moderation the Republican candidate projects for himself. It’s no secret that George the Second lacks intellectual depth–even his father’s–and the stubborn ideological self-confidence that made the Gipper so effective in Washington. The big ideas are mostly inherited, modified to appear as unthreatening as possible. No Republican talks “revolution” anymore.

Given current circumstances, this package may be a stealthy fit with public indifference, at least more difficult for Democrats to demonize. To craft his program, George W. assembled a team of economists that roughly reflects elements of the old Reagan coalition but without the hard-edged, zany fervor. Martin Feldstein of Harvard has campaigned to disassemble Social Security for more than twenty years and chaired Reagan’s Council of Economic Advisers, but he also got bounced when he persisted in worrying aloud about the soaring federal deficit. Michael Boskin of Stanford filled the same role in Bush Senior’s White House and participated in the heretical act (for Republican true believers) of raising the top income tax rate to reduce the deficit. These two and some others are no longer pilloried as sellouts by the hardcore supply-siders (Newt Gingrich, who led the backbench rebellion against George Senior’s tax increase, has since retired to the stud farm).

On many large matters like globalization, a Bush administration would take its cues not from academic economists but from the business and financial establishment–not so different from Bill Clinton’s tenure (though Bush would doubtless drop the rhetorical flourishes about labor and environmental rights). Republicans always have deeper bench strength for filling such crucial economic positions as Treasury Secretary, and they already have Alan Greenspan running the country at the Federal Reserve. So the distinctive differences are the plans for tax cuts and Social Security privatization drafted by his economic team.

His leading adviser–and the best reflection of Bush’s artful strategy–is a putative spokesman for the supply-side wing of the Republican Party. Lawrence Lindsey is a former Federal Reserve governor and ex-Harvard professor, now at the American Enterprise Institute and awaiting GOP restoration, who is likely to fill a key position if Bush wins. Lindsey was warmly embraced by the supply-siders twenty years ago because he was one of the few mainstream economists willing to aver that their theory was not nuts (and had the imprimatur of Harvard). Supply-siders helped him win appointment to the Federal Reserve Board, but some now see him as an apostate, who has adulterated the true faith in the interest of career advancement. Bush would cut the top tax rate but wouldn’t get it back to the lower level established by Reagan or propose further reduction for capital gains (already reduced by Clinton).

“Maybe it’s the populist in me, but capital should be taxed,” Lindsey told The Weekly Standard last year. “The government spends a lot of money protecting it.” That sort of talk sounds suspiciously progressive to some on the right. On occasion, Lindsey can sound dangerously open-minded.

Not to worry. Like the nominee, Larry Lindsey is more loose and likable than many stiff-necked conservatives, less dogmatic than doctrinaire ideologues, but the nimble amiability stays safely within party lines. “I studied at Harvard and learned Keynesian economics, and I certainly agree that it works under certain circumstances,” Lindsey observed. Then he suggested that if the economy goes into the ditch, as he actively fears, Bush’s proposed $1.6 trillion tax cut plan can be speedily enacted to provide emergency stimulus. “I would call it a fiscal insurance policy–in case needed,” he said. “What we would do, I think, is accelerate [implementation of] the tax cut.”

Lindsey is mischievously poaching on territory that used to belong to liberal Democrats–except their Keynesian pump-priming measures were always denounced by conservatives as reckless interference with nature, and Democrats tried to put the cash in the hands of working people, who would promptly spend it. Bush’s tax cutting, like Reagan’s, would deliver the money, overwhelmingly, to people who are already rich or very rich. So any Keynesian impact on consumer demand and the economy would likely be slight–but the tax cuts might give a smart boost to the struggling stock market. Supply-side theory, after all, assumes that the very wealthy will not buy more cars and houses but will invest the surplus income in industry, thereby making more jobs for the rest of us. This hoary “trickle down” approach sounds especially dubious in present circumstances. On the other hand, Bush’s package is comparatively modest alongside the Reagan original and would not produce a radical unraveling of fiscal balance, as Reagan’s did.

The man and the program are genuinely moderate in some respects, but they apply good cosmetics to familiar Republican features. Lindsey seems to possess an adaptable intellect himself (a capacity for growth, friends might say). At 18, he was a volunteer for George McGovern on the Bowdoin College campus in the 1972 election but changed churches shortly thereafter. At the Federal Reserve, Governor Lindsey served as liaison to its Consumer Advisory Council and styled himself as that rare conservative economist who supports the Community Reinvestment Act, the federal law prohibiting banks from redlining poor neighborhoods. Meanwhile, he joined bankers and other hard-liners in promoting amendments to weaken the law. When community housing advocates blew his cover and angrily confronted him at an advisory council meeting, Lindsey was so rattled he was in tears, defending his virtue.

When I asked him to justify the regressive nature of Bush’s tax proposal, Lindsey sounded like a regular bleeding heart. The single biggest component, he insisted, is helping struggling “single moms” to get over. The Bush reforms, he explained, would remove certain bottlenecks in the tax code that act like “the tollgate to the middle class for self-supporting people who are out of dependency but hardly prosperous.” The problem he describes is real–the kind of inequity normally tackled by liberals. As wage-earners advance beyond poverty and lose eligibility for income-support benefits like the earned-income tax credit, they face a very high marginal tax rate on every additional dollar they earn. The Bush plan helps them by doubling the tax credit for children and creating a new, lower tax bracket at 10 percent plus charitable deductions for nonitemized returns. The result, Lindsey estimates, is that the zero-tax threshold would move up to $31,000 for single wage-earners with children, $35,000 for married ones.

The idea is genuinely progressive, but, Lindsey’s warm, fuzzy populism notwithstanding, it provides cover for a much larger income transfer in the opposite direction. The helping hand for single moms would deliver about $2.6 billion to families of moderate income (only 1.5 percent of Bush’s total package, according to Robert McIntyre of Citizens for Tax Justice). Meanwhile, 60 percent of Bush’s tax reductions ($81 billion) would go to some 13 million taxpayers who are already the best off in the land. It sounds like Reagan’s old song, with sweeter lyrics.

The other central element in Bush’s economic agenda–reforming Social Security with private investment accounts–involves a similar sleight of hand. While the rhetoric suggests that Bush’s scheme will “solve” the financial shortfall supposedly looming in the future, Lindsey candidly conceded that that’s not the case. Futhermore, while young people seem more attracted to Bush’s plan than skeptical elders, it is actually the younger generation of new workers who are destined to lose most, because of the cost of diverting Social Security revenues into the new individual stock accounts while still paying benefits to retirees. Lindsey also does not deny this either, though it is a central point of the critics defending the system.

“At some point,” he explained, “a transfer from general revenues will be needed to help with the transition’s negative cash flow…. Bush has said it several times, and I’ve said at least 200 times that we are going to have to have that transfer from general tax revenue.” In other words, Lindsey assumes that sometime around 2040 the government will have to borrow the money to keep everyone whole. Otherwise, it will have to raise taxes or cut Social Security benefits deeply, or both–just as Social Security defenders warn. In fact, the liberals have been saying all along that if there is a future shortfall–if–the government can solve it in just this manner. It’s an awkward admission for Republicans because it contradicts the doom scenario promoted by conservatives.

If a straightforward solution is so obvious, why doesn’t George Bush make a clear, firm promise right now that his reform plan will not require cutting anyone’s benefits or raising taxes? “That’s a political question that has to be decided in 2040,” Lindsey replied lamely. Nevertheless, couldn’t Bush still make the promise this year? “We really want to get this done next year,” he explained. “If Bush ties himself to too many promises, it can’t get done. That’s why it sounds like we’re hedging and not giving all the details. The more wiggle room you have, the better chance you have of getting something done.”

A few days after the interview, Lindsey appeared on the Op-Ed page of the Wall Street Journal blasting Al Gore’s “risky Social Security scheme” for the very same eventual shortfall that he had just admitted was inescapable under Bush’s plan. This is what you might call “wiggle-room economics.”