32.2 The domestic mission

By the time George W. Bush became president, the concept of supply-side economics had become an article of faith within the Republican Party. The oft-repeated argument was that tax cuts for the wealthy would allow them to invest more and create jobs for everyone else. This belief in the self-regulatory powers of competition also served as the foundation of Bush’s education reform. But by the end of 2008, however, Americans’ faith in the dynamics of the free market had been badly shaken. The failure of the homeland security apparatus during Hurricane Katrina and the ongoing challenge of the Iraq War compounded the effects of the bleak economic situation.

Opening and closing the gap

The Republican Party platform for the 2000 election offered the American people an opportunity to once again test the rosy expectations of supply-side economics. In 2001, Bush and the Republicans pushed through a $1.35 trillion tax cut by lowering tax rates across the board but reserving the largest cuts for those in the highest tax brackets. This was in the face of calls by Republicans for a balanced budget, which Bush insisted would happen when the so-called job creators expanded the economy by using their increased income to invest in business.

The cuts were controversial; the rich were getting richer while the middle and lower classes bore a proportionally larger share of the nation’s tax burden. Between 1966 and 2001, one-half of the nation’s income gained from increased productivity went to the top 0.01 percent of earners. By 2005, dramatic examples of income inequity were increasing; the chief executive of Wal-Mart earned $15 million that year, roughly 950 times what the company’s average associate made. The head of the construction company K. B. Homes made $150 million, or four thousand times what the average construction worker earned that same year. Even as productivity climbed, workers’ incomes stagnated; with a larger share of the wealth, the very rich further solidified their influence on public policy. Left with a smaller share of the economic pie, average workers had fewer resources to improve their lives or contribute to the nation’s prosperity by, for example, educating themselves and their children.

Another gap that had been widening for years was the education gap. Some education researchers had argued that American students were being left behind. In 1983, a commission established by Ronald Reagan had published a sobering assessment of the American educational system entitled A Nation at Risk . The report argued that American students were more poorly educated than their peers in other countries, especially in areas such as math and science, and were thus unprepared to compete in the global marketplace. Furthermore, test scores revealed serious educational achievement gaps between white students and students of color. Touting himself as the “education president,” Bush sought to introduce reforms that would close these gaps.