WASHINGTON — Sen. Edward M. Kennedy (D-Mass.) on Wednesday proposed slowing down the tax cut passed last year and President Bush immediately rejected the idea, framing an issue expected to play a major role in this year's congressional elections.
Kennedy, who last week joined Bush in a three-state tour celebrating a bipartisan agreement on education policy, is the most prominent Democrat to call for altering the 10-year, $1.35-trillion tax cut the White House touts as one of its signature achievements. Other leading Democrats, including Senate Majority Leader Tom Daschle of South Dakota, have intensified their criticism of the law but have stopped short of urging changes to it.
In a speech at the National Press Club, Kennedy argued that an escalating budget deficit demands that tax cuts aimed at the affluent be modified if high-priority social needs are to be met.
"Future additional tax breaks for the wealthy do not deserve higher priority than strengthening education, covering prescription drugs under Medicare, or protecting Social Security, or meeting other urgent national priorities," he said.
Daschle and many other Democrats are fearful of the potential political damage of pushing for the changes advocated by Kennedy, and argue that it is Bush's job to respond to the budget deficit. But Kennedy's speech established a liberal Democratic alternative to Bush's own effort to focus on domestic policy as both parties gear up for November elections in which control of the House and the Senate will be at stake.
Although Bush this week has continued to mention the cooperation he and Kennedy achieved to gain passage of the bill seeking to improve public schools, he quickly slammed the door concerning compromise in the tax arena.
"When the economy slows down, it makes sense to cut taxes, and that's exactly what's happened," Bush said.
He equated a delay in imposing tax cuts with a tax increase, an argument other Republicans are sure to echo on the campaign trail.
"Raising taxes in the midst of a recession is wrong economic policy," Bush said. "It would be a huge mistake. It's bad for American workers. It will hurt when it comes to creating jobs."
The tax cut was at the center of Bush's economic policy during his first year in office and cleared Congress with a smattering of Democratic support.
Kennedy's plan would delay $350 billion of the tax breaks.
