LexingtonBeware the K-Street conservatives

The only people who could stop a Bush second term

NEVER underestimate George Bush's ambition. Back when he was a mere shrub in Texas he succeeded in turning a small victory in his first race for governor into a resounding triumph in his second. Now he is well on the way to doing exactly the same thing on a national scale. Work is well advanced on both next year's budget and his state-of-the-union address. The president's staff are casting around for a big idea to galvanise his domestic agenda for the next couple of years—perhaps even adding individual-investment accounts to Social Security.

The Republican Party now thinks it is close to replacing the Democrats as America's majority party. In 2004, the talk is not just of a second term for Mr Bush but of expanding the party's majority in the Senate (the Democrats are defending more vulnerable seats). Some obvious things could still get in the way: a disastrous war in Iraq, or a severe downturn in the economy. But a more subtle threat could come from the party's business wing.

How could business be a problem? The president has hardly made a secret of his belief that the business of America is business. He stuffed his cabinet with the sort of people whose first reaction to news of some tycoon's obscene retirement package is to wonder why they hadn't fixed so luscious a deal for themselves. Mr Bush spent his first two years in office delivering tax cuts and “regulatory roll-back” to the industry lobbyists who hang their hats in Washington's K Street.

And isn't the lesson of Enron that Mr Bush is immune from corporate scandals? The oil-and-gas company sprang from the heart of Bush country. “Kenny Boy” Lay was a close personal friend of the Bushes, and his minions played a leading role in designing the administration's energy policy. The public's reaction to the infamous corporate scandal that hastened the stockmarket's collapse? They exempted Mr Bush from blame, and voted for Republicans the first chance they got.

But K Street could nevertheless end up hurting Mr Bush with the K-Mart crowd. The most obvious problem is the growing temptation to over-reach. The trouble with lobbyists is that their appetite only grows with the eating—as anyone who visits Morton's steak-house or any of the other temples to gluttony around K Street can testify. The Republicans celebrated last month's triumph by fast-tracking several K-Street favourites: exempting older coal-fired plants from new anti-pollution rules, and making it easier to open national forests to logging and drilling.

The lobbyists' biggest coup has been the revision of the Homeland Security Bill. One new provision allows companies that have registered overseas to escape American taxes when they get contracts with the department. A second provision frees companies that make faulty anti-terrorism equipment (such as bomb detectors and gas masks) from liability to prosecution. A third restricts the liability of drug companies that produce smallpox vaccines. A fourth tries to shield Eli Lilly from lawsuits seeking billions of dollars for families of autistic children. And there is more of this sort of stuff to come. Last month the lords of the pharmaceutical industry—who spent $35m on the two most recent elections—went into a huddle to plan their next demand.

Now, some of these things are more nuanced than they appear; and a few other corporate lobbying campaigns, such as the one for a simpler tax code, may even be downright healthy. But in politics appearances count, and this sort of thing spells danger for a president who is reaching out to voters of the middle ground. Most swing voters, particularly women, put the environment high on their list of concerns. And Mr Bush surely needs to be holier than the pope on security issues. It is hard to ask Americans to make sacrifices for the sake of national security if you are handing contracts to companies that refuse to pay taxes. And it is a bit rich to claim that defence is your over-riding priority if you apparently let your fellow Republicans doctor the Homeland Security Bill for the benefit of a big drug firm.

But the biggest problem with K-Street conservatism is that it puts producers in front of everybody else. There was a time when conservative Washington was full of Adam Smith enthusiasts who solemnly intoned that good government must promote competition, not hand out favours to cronies. But most of those young Reaganauts have long since taken the lobbying industry's dollar. Now the talk is of commerce, not competition.

The Republicans' incestuous relationship with the business establishment has blunted its enthusiasm for corporate reform. The collapse of Enron and WorldCom revealed serious structural problems: too much power for imperial executives, too few independent directors, too little concern for shareholders' rights. But the White House still seems to think that the scandals were about a few bad apples rather than rotten branches and roots.

K Street v K-Mart

Mr Bush has proved remarkably adept at dumping his business cronies when they become bothersome: Kenny Boy rapidly became Ken Who? But so far the only restraining order the Republicans have put on K Street has to do with money. Tom DeLay and Trent Lott, the heads of the House and the Senate, have told lobbyists to stop dividing their largesse between the two parties; now the Republicans should get 90% of the pot.

So far the Democratic Party has been startlingly inept at making an issue of Mr Bush's corporate connections. But you cannot build an enduring Republican majority on the assumption that the other side will remain incompetent for ever. Mr Bush should remember that even Al Gore, perhaps the most unattractive presidential candidate since Richard Nixon, managed to win 51m votes with a populist campaign that pitted the people against the powerful. It is by no means impossible that a more attractive populist, perhaps North Carolina's John Edwards, may still be able to twist K Street conservatism into a winning issue.

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