The next president will be the first elected in the 21st century, and he will need to act as if the country and the world are in a new era - because they are. Some of the key areas the new administration needs to address:
* The economy: No matter who wins the election next week, he will inherit a country in good condition. His first and most important task will be making sure he doesn't mess it up. The foundations of the current economy are in dispute, whether credit belongs to the Reagan administration, Paul Volcker/Alan Greenspan, the Clinton administration, or dumb luck. But the engine of the economic growth clearly began in the early 1980s through policies that sought to restrain taxation and regulation and government spending, policies basically continued through the 1990s, despite some major tax increases. In addition, freer trade policies, especially the North America Free Trade Agreement and new agreements with China, have promoted a more productive economy, domestically and globally. These kinds of trade policies need to be expanded.
* Business: Free enterprise, not some Works Progress Administration program, created the extraordinary growth in the economy and financial markets, especially in the last few years with the explosion of the Internet. Wisely, the Clinton administration and Congress have resisted efforts to raise taxes and increase regulation on this new medium of communication and commerce. But misguided antitrust action against Microsoft Corp. destroyed billions of dollars in value for pension plans and other investors and caused unease in the entire technology sector with fears of new regulation. The new administration needs to avoid new taxes or regulation.
* Government: Any new administration will be tempted to satisfy its voters and enact its campaign promises. The temptation will be greater than usual because of the projected budget surpluses. The winner should move slowly and temper the instinct to spend the surplus before it actually arrives. Legally mandated spending goes on forever, unless specifically repealed - something notoriously difficult to do. Aggressive attempts to attack perceived social problems by expanding access to health care or improving education may well lead to spending increases that match the revenue flows from the strong economy. That is, the projected surplus may be spent before it is generated.
A good part of the surplus, as it is generated, should be used to pay down the national debt - but not all of the debt. Alexander Hamilton once noted that a federal debt, "if it not be excessive," would be a blessing to the nation. Without some federal debt, monetary policy would be more difficult to conduct. Also, long-range capital projects should appropriately be paid for over a longer term.
* Social Security needs to be privatized, even if gradually, as intimated by the Bush plan. The technology and knowledge of investing have improved vastly since the 1930s, when the program began. The Bush plan would allow participants to invest 2% of their contributions. It would be voluntary; participants could choose to remain wholly in the existing program. Most Democratic leaders, and many Republican, oppose this idea. But this invested money would be safer than the rest of the Social Security benefits, subject so often to reductions in one form or another.
* Defense. The economy over the past decade has benefited from the end of the Cold War. But the world is still dangerous. The terrorist attack on the USS Cole gives credence to the notion that some of the best people, who might have foreseen such danger and prepared for it, might have left the military, disenchanted over the course of reductions and policies in the last decade. If the military is expected to perform all of its current missions, it will need more money. If the new president doesn't want to spend that money, he will have to specify which missions are no longer critical.
There are many other issues the new administration should address in the upcoming four years, including retirement income policy, but if it attempts to do everything in the first two years, it may well kill the economic boom that is producing the current and forecast surpluses. Therefore, the new administration's mantra should be the doctor's dictum: First, do no harm.