April 16, 2003
WASHINGTON -- On tax day, President Bush indicated that he would accept a reduction in his proposed tax cuts to $550-billion over ten years -- far less than the $726-billion he requested, but still above the $350-billion backed by the Senate.
"The proposals I announced three months ago were designed to address specific weaknesses slowing down our economy and keeping companies from hiring new workers. Those weaknesses remain today," Bush said Tuesday at a White House rally designed to rekindle attention to the plan.
The president and his advisers hope to translate momentum from Iraq war successes into support for his domestic agenda.
But Bush's tax-cut plan has met with increasing resistance in the Republican-controlled Congress. Most Democrats and even some moderate Republicans have questioned the wisdom of slashing taxes at a time of rising deficits and unknown Iraq war and reconstruction costs.
"The president's insistence on more huge debt-financed tax cuts in the face of big deficits is disappointing," Rep. John Spratt of South Carolina, senior Democrat on the House Budget Committee, said after Bush's speech.
Bush argued that such cuts are justified because of the sluggish economy.
"We need tax relief totaling at least $550-billion to make sure our economy grows," he said.
The $550-billion level is at the top of the range now before Congress. It has been endorsed by the House, where support for Bush's program is the strongest. But the more closely-divided Senate has thus far rejected anything larger than $350-billion.
Bush's plan would speed up various tax cuts due to be phased in during the next seven years, including an immediate increase in the child tax credit from $600 to $1,000 and tax relief for married taxpayers. It also would eliminate most taxes on stock dividends -- the feature that has received the most criticism.
Administration officials said that most of their objectives could be achieved with $550-billion in cuts, although it would likely mean a scaled-down version of the dividend tax break.
Tuesday's speech, coinciding with the deadline for filing federal income tax returns, came as Bush returned to a prewar routine. He planned to promote his economic plan in St. Louis today before beginning a long Easter break at his Texas ranch.