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THE FEDERAL BUDGET

Bush Tax Plan Gets Road Test

Politics: The president begins a five-state swing to push his budget, warning Congress that irresponsible spending could 'affect economic vitality.'

March 01, 2001|EDWIN CHEN | TIMES STAFF WRITER

COUNCIL BLUFFS, Iowa — President Bush set out Wednesday to sell his $1.6-trillion tax cut directly to the American people, launching a two-day swing through five states.

But he reserved his most impassioned rhetoric for a stern message to Congress, urging lawmakers not to indulge in pork barrel spending.

With a projected $5.6-trillion surplus over the next 10 years, Bush fears lawmakers will be tempted to divert funds needed for his priorities--educational spending and tax cut relief--into favored if flawed programs.

"I urge the Congress to be cautious about overspending," Bush said during a stop at a small business in Beaver, Pa., near Pittsburgh. "A bloated federal government will affect economic vitality."

The president said Congress should be satisfied with the 4% increase in overall discretionary spending that he is proposing in his budget blueprint, which was unveiled Wednesday. That is just above the current rate of inflation, Bush noted.

Although Bush decried the growth in federal spending, there has been bipartisan pressure to dole out federal aid to various programs nationwide ever since the fiscal showdown between President Clinton and the Republican-led Congress led to a government shutdown in 1995-96.

Last year, for example, discretionary spending on education rose 18%--after several years of large increases. Overall, during the eight years of the Clinton administration, Education Department funding jumped by 76%.

In other discretionary programs, defense spending last year rose by 7%, transportation spending by 24% and funding for the Treasury Department and other government agencies by 16%.

The final budget accord that wrapped up the 106th Congress, in fact, was approved in December--after Bush emerged as the presidential victor--on a vote of 292-60 and in the Senate by a voice vote. That indicates that reining in the spending habits of Congress may prove an enormous challenge for the new president.

Last year, Congress adopted a federal budget with 8% growth in spending--twice what Bush is proposing.

"That's significantly higher than the rate of inflation," the president said. "That was higher than real income grew. I mean, they were growing that budget just like a bidding contest to see who could spend the most money and get out of town first. Those days must end."

Overspending Is Biggest Threat, Fleischer Says

White House spokesman Ari Fleischer, adding to Bush's comments, said that if Congress adopted a 6% growth rate in domestic discretionary spending--the average for the last three years--it would reduce the surplus by $1.4 trillion over 10 years.

"President Bush believes very strongly that [overspending] is the biggest threat in spending the surplus," Fleischer said. "Congress spends unless they are held in check."

But the press secretary added that, "with a little bit of executive leadership," Bush will succeed in persuading Congress to restrain spending. "But it's going to take work."

As the president left Washington amid light snow flurries on the morning after his first address to a joint session of Congress, Fleischer told reporters that the White House comment line ran about 20-1 in Bush's favor after his address.

"The president feels very good about the speech, about the reception he received [from] Democrats and Republicans alike," Fleischer added.

Bush's first appearance Wednesday, at Control Concepts, a small Pennsylvania manufacturer of industrial on-off switches, appeared highly scripted. His hosts were Carolyn Taylor and her son, Geoff, the firm's CEO and president, respectively. They were joined by David Berger, a technician at the company, and his wife, who served as an example of how families can benefit from the tax cut.

The questions and comments allowed Bush to highlight not only his tax-cut proposal but also his intentions to reform education, Social Security and Medicare. The president's often terse remarks for the most part were virtual excerpts from his Tuesday night speech.

As he did in his address to Congress, Bush began by talking about extending the viability of Social Security and Medicare, including adding a prescription drug coverage component to the health insurance program for seniors.

Only then--with more than $2.6 trillion of the projected surplus left over, Bush said--did he tout his tax cut, which many Democrats argue is too large and disproportionately favors the wealthy.

Bush rejected that contention, saying: "The best tax relief is to treat everybody fairly" by excluding no taxpayer.

Amid a plethora of signs of an economic downturn, Bush added, an across-the-board tax cut "will add a second wind to an economy that's slowing down."

And taking a line almost verbatim from the 1996 campaign of Republican presidential nominee Bob Dole, Bush told his listeners at every stop: "The surplus is your money, not the government's money."

In Beaver, Pa., the president said he harbors no illusions about the difficulty of reaching a political consensus on Medicare reform.

"It's going to be a titanic struggle," he said.

From western Pennsylvania, Bush flew to Omaha, where he addressed several thousand enthusiastic supporters in a campaign-style event at the Civic Center. At one point, the crowd responded to Bush's arguments for a tax cut by chanting: "Refund! Refund! Refund!"

Bush carried Nebraska in November by a greater margin than he did Texas, his home state.

From Omaha, the president's motorcade took him to Council Bluffs, just across the border in Iowa. He spent the night in Little Rock, Ark., where today he is to discuss education at an elementary school. The president also will stop in Atlanta this afternoon en route to Washington.

*

Times staff writer Nick Anderson in Washington contributed to this story.

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