Bush Pitches Tax Cut

Feb. 5, 2001 -- Offering "relief for everybody who pays taxes," President Bush began a concerted public push today to build support for his tax-cut plan.

"Under the plan I'll be sending to Congress later this week, every American who pays income taxes will get tax relief," Bush said at a White House press conference with three middle-income families this morning. "This is real and practical help, when at this time, Americans need it."

Bush's meeting with middle-class families, reminiscent of the ones he staged during the campaign last year, was intended to make the case that the president's across-the-board cut in income tax rates would benefit all Americans.

"The biggest percentage cuts will go to the families who need it most," Bush added. "My plan addresses the struggles of American families, and respects their judgment. It doesn't tell people how to spend their money. It's tax relief for everybody who pays taxes."

In his comments, Bush dismissed the idea that his plan, which would result in a significant drop in income tax rates for those in the highest tax bracket, is tilted too heavily toward the wealthy.

"I strongly believe the plan I have submitted is structured the right way," the president said. "I think when people take a good hard look at the rate reduction and who benefits … people will come to realize it."

One Plan, 10 Years, $1.6 Trillion

Bush's tax plan, which he made a central promise of his campaign, consists of a 10-year, $1.6 trillion cut that would lower income tax rates in all brackets. The president's proposal would also combine the five basic income tax brackets into four categories, and lower the highest tax rate to 33 percent.

"Our tax code should not punish success at any stage of life," Bush said, adding, "people can sometimes feel like thejunior partner in their own lives, and that's why we set the top rateat 33 percent."

Bush will submit a broad outline of the plan to Congress on Thursday. Between now and then, he will spend much of the week staging public events designed to build support for the proposal.

On Tuesday, the president will meet with small business owners, and on Wednesday he will visit with another group of "tax families" at the White House — this time, a group of the same families he met with at campaign stops last year.

Stepping up the administration's efforts to drum up public support for the proposal, Bush's top economic adviser, Lawrence Lindsey, hit the airwaves this morning, saying the plan would have a direct impact on Americans' personal finances.

"A family of four, for example, making $40,000 will get a $1,600 tax cut," said Lindsey on ABCNEWS' Good Morning America. "That is a big increase in their take-home pay … I think it's a very fair tax cut, it's targeted at putting money in people's pockets."

Today Bush also had a private lunch with Federal Reserve Chairman Alan Greenspan, who gave the president's plan a huge boost last month when he endorsed a tax cut while testifying before the Senate.

Battle With Democrats Ahead

Still, Bush faces a tough fight in getting his tax package through Congress. His proposal has already generated considerable criticism from Democrats, who say there are two major faults with the plan: that it would risk the federal budget surplus and favors the rich.

"We do not want to repeat 1981," said Senate Minority Leader Tom Daschle of South Dakota at a Capitol Hill press conference this afternoon, referring to the large tax cut passed after Ronald Reagan came into office. "That led us to a $4 trillion public debt that we're still saddled with today. Let us not repeat the mistakes of the past. If we do, shame on all of us."

Appearing at the same news conference, Sen. Kent Conrad, the ranking Democrat on the Senate Budget Committee, called the Bush plan "unfair," adding, "It goes primarily to the wealthiest among us."

In an effort to win political support for the plan, Bush took the unusual step of traveling on Sunday to meet with Democratic leaders at a party conference in Western Pennsylvania.

"I think they listened," Bush said as he left the two-hour meeting. "I have no idea until the votes come."

Some Democrats, including Daschle, have suggested allotting roughly $900 billion, or one-third of the estimated budget surplus, on a tax cut, leaving equal portions for government programs such as education, and to keep paying down the long-term federal debt.

Even that represents a concession by Democrats, many of whom opposed a $792 billion tax cut passed by the Republican-led Congress, but vetoed by President Clinton, in 1999.

Some congressional Republicans, on the other hand, have been calling for a bigger tax cut than Bush is suggesting. But this afternoon, White House spokesman Ari Fliescher indicated the president would not be likely to increase the size of his tax package at the behest of his GOP allies.

"What you'll see is a number of Democrats say they want to keep taxes higher … and I think you might see some Republicans who say it's not enough taxrelief," Fleischer said. "The president's proposal, in his opinion, is the right amountto cut taxes."

Are Lower Taxes A Public Priority?

In addition to wooing Democrats, Bush may have to work hard to generate public enthusiasm for his plan. An ABCNEWS poll taken in January showed respondents ranking tax cuts 12th in importance among 18 major issues, with education, the economy and Social Security topping the list.

However, Bush was further helped in his efforts to sell the plan by a government report last week that projected an increased budget surplus over the next decade.

According to an estimate made by the Congressional Budget Office, the surplus will total $5.6 trillion over the next decade. Subtracting the portion of the surplus dedicated to funding Social Security, that would leave a 10-year surplus of $3.1 trillion.

Members of the Bush administration have been emphasizing that even accounting for Social Security, the budget projections leave room for Bush's proposal. Today Lindsey characterized the tax cut as comprising "exactly half" of the surplus.

Democrats have countered by saying the CBO's surplus estimate is too imprecise to help justify a large tax reduction.

"I don't think we ought to be betting the farm on a 10-year forecast," said Conrad this afternoon. "That's just not wise."

So the president, while faced with the prospect of having to work out a compromise, is sticking to his guns for the time being.

"This is the right-size plan, it is the right approach, and I'm going to defend it mightily," Bush said this morning.