Democratic:
The startling debut in the Gallup organization’s poll of retired Gen. Wesley Clark to a commanding first place in the national Democratic polls and ahead of President George W. Bush has shuffled and dealt the presidential deck again.
1) The biggest caveat about this stunning development is that this is a national poll, which does not carry much significance at this time. The New Hampshire and Iowa polls are far more significant. Nobody really knows whether Clark’s national popularity will translate to these states.
2) Similarly, political pros know that one-on-one general election polling means almost nothing at this point in the game. Just as Bush’s huge leads a few weeks ago should have been discounted, so should Clark’s narrow lead.
3) Nevertheless, Clark’s emergence makes two valid political points: a) that none of the earlier nine Democratic candidates had really won the hearts of voters; b) that Bush indeed is in a severe decline, just as Republicans have suspected.
4) But why Clark? Because his image as a four-star general who is "non-political" is at least temporarily overpowering. He seems a step ahead of the prosaic politicians-before they begin to beat down on him.
5) Practical liberal Democratic politicians in particular have adopted Clark. They find his military record inoculates him from the national security issue that they feel devastated Democrats in the 2002 mid-term elections and still is dependably liberal on all the issues.
6) Neither Clark’s Democratic rivals nor the Republicans know exactly how to deal with him. He has many vulnerabilities, but strategists think a frontal assault at this point may be counterproductive.
7) Clark’s past support for Republican presidential candidates and his belated accession to the Democratic faith raise eyebrows. The precedent of Dwight D. Eisenhower, widely thought to be a Democrat before his Republican candidacy, is cited. But, Kosovo aside, Clark is certainly not the national hero that Eisenhower was.
8) Clark’s biggest vulnerabilities are his unfamiliarity with the issues and his unpopularity inside the military establishment that produced a host of potential critics. The question is how he handles the hard times ahead.
9) Clark’s support comes right out of the heart of former Vermont Gov. Howard Dean-and his outside-the-beltway appeal. The serious development is that his emergence deflates the Dean phenomenon.
10) The notion that Clark is a stalking horse for Sen. Hillary Rodham Clinton (D.-N.Y.) seems absurd. She has made clear she is not running and could easily run on her own without help from Clark. Also, Clark has not been on the best of terms with Bill Clinton.
11) Still, it is possible that Clark is entering the race at the Clintons’ behest, more as a power-play by the former first couple than a place-holder. The ascendance of Dean has been a rebuke to the Clinton-McAuliffe Democratic establishment. Clark may be the establishment striking back.
Republican:
The lead by Gen. Clark confirms that President Bush is in the midst of the classic third-year presidential syndrome, the year where a first-term president habitually declines.
1) It should be remembered that Richard M. Nixon recovered from a severe third-year syndrome to win 49 states for reelection. Nobody in the Republican establishment expects 2004 to be another 1972 or 1984, however. This figures to be a very close election.
2) The two factors Republican strategists point to as indicators of Bush’s course are Iraq and the economy. But his precipitous drop over the last several weeks points to possible personal problems with the electorate.
U.S.-Export Subsidy:
Congress may, in fact, act this year to change international corporate tax law after a WTO ruling condemning an "export subsidy."
1) The bipartisan leadership of the Senate’s tax-writing Finance Committee, is pushing a bill to end the special treatment for some export sales called the Extraterritorial Income Exclusion (ETI). But this must be paired with offsetting tax breaks, because anything else would amount to increasing taxes-causing President Bush to repeat his father’s mistake.
2) The Finance Committee’s plan would replace ETI with another tax break for U.S. corporations, but the new tax break would not be limited to exporters. The Senate is still considering making room for more business tax breaks by eliminating a tax credit for U.S. workers who work overseas.
3) With the House looking at a fairly clear agenda for the fall, the major obstacle to this bill is the Senate. If both parties decide that this is politically neutral, they may be willing to spend a few hours on it. However, such a bill gives Democrats a chance to demagogue about tax cuts for the rich.
