President Bush said Tuesday he outlined a crackdown on corporate corruption in the wake of recent business scandals that have resulted in thousands of people losing their jobs and retirement savings. Opposition Democrats say the president needs to do more and seem poised to make the issue of economic security a major factor in midterm congressional elections in November.
With public anger mounting over a series of accounting scandals and investor confidence in the stock market waning, the president announced a get tough policy with corporate criminals.
Mr. Bush proposed longer jail sentences for corrupt corporate executives and announced the formation of a new task force to probe business fraud. "All investment is an act of faith, and faith is earned by integrity. In the long run, there is no capitalism without conscience," he said. "There is no wealth without character."
The president is well aware that the Republican Party is historically seen as the party of big business. So it was important that he been seen as taking an activist approach toward corporate crime.
But business groups are already pressing the president and Congressional Republicans not to go too far in enacting new laws aimed at reigning in private companies.
The president of the U.S. Chamber of Commerce, Thomas Donahue said, "We must resist the temptation to implement overreaching responses that could have significant, long-range negative consequences for our markets and our economy."
On the other hand, opposition Democrats believe the president's plan does not go far enough. They also see political opening in the accounting scandals by trying to portray Mr. Bush as too closely aligned with big business.
Democratic Congressional leaders held a news conference shortly before the president's speech Tuesday. Among those who spoke was Cara Alcantar who lost her job and retirement savings last month after being laid off because of an accounting scandal involving the telecommunications giant WorldCom.
"This is a serious situation," she emphasized. "Thousands are being laid off, losing part or all of their retirement investments and feeling another loss altogether, the loss of faith in corporate America. If the real reform does not happen, I will never be able to believe in a large corporation again."
Democrats in Congress are pushing for sweeping legislation aimed at strengthening business and accounting practices.
Senator Patrick Leahy, a Democrat from Vermont, said, "Innocent consumers, investors and employees depend on stock investments for their children's college funds, for their retirement nest eggs, for their savings. And every week brings news of a new financial scandal. Look at the effect on the stock market. It has been devastating."
But Democrats cultivated their own ties with big business in recent years, especially in the stock market boom during the Clinton administration, and, like Republicans, many of them receive large campaign donations from business groups.
Supporters of corporate reform, like former Green Party presidential candidate Ralph Nader, stressed neither major party is in a position to enact real change aimed at protecting workers and investors. "The Democrats supposedly want to recover the House and retain the Senate," said Mr. Nader. "The question is, do they want to retain their corporate contributions more than they want to speak up for the people of this country and defend them and in the process recover the House of Representatives and retain the Senate."
President Bush continues to ride high in public opinion polls largely because of his response to last September's terrorist attacks. But Mr. Bush is mindful of what happened to his father. He enjoyed overwhelming public support in the wake of the Gulf War in 1991, but lost his re-election bid to Bill Clinton a year later largely because voters lost faith in his ability to deal with a weakening U.S. economy.