Did Bush Win by Losing?

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President Bush's subdued showing at his press conference Wednesday was nothing like his rather peppery performance right after he won re-election in 2004. Could it have been all just an act? Maybe Bush is actually better off having lost the House and apparently the Senate than with the GOP narrowly holding them. Hard to believe–and unless he has Morgan Freeman-esque acting skills, Bush doesn't appear to believe it himself. But the guys at Macroeconomic Advisers, an economic consulting firm with great inside-the-beltway connections, sure do. Here is the firm's contrarian take on the election outcome:

The surprise winner in all of this is the president. The White House comes out ahead in two dimensions. First, there is a greater chance of immigration reform–the kind of "legacy" win that is a priority for the lame-duck president. Second, the administration is freed to send to Congress unvarnished versions of [its] preferred policies–versions [it] couldn't send up before because they would likely fail and embarrass Republicans in Congress. Now, when these same proposals do not pass, it will be possible to point fingers at the Democrats. ... The big losers are moderate Republican senators who remain in Congress. These few key senators have held the keys to passage in the Senate and exploited their party and position. With little major legislation likely to pass and more conservative Democratic senators to share the middle, they lose their power.

The firm also doesn't completely rule something being done on Social Security reform during the next Congress. In its view, Treasury Secretary Henry Paulson is the "wild card" here: "If Paulson can move the White House to putting some base broadening [not higher tax rates] into the effort and personal accounts do not come out of current financing, there will be room for a deal. But odds remain stacked against reform."