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'Soggy' Economy Needs a Shot of Tax Relief, Bush Says

He's targeting home states of Democrats sympathetic to his push for $550 billion in cuts. Move comes as Senate readies debate on issue.

May 13, 2003|Edwin Chen and Janet Hook | Times Staff Writers

OMAHA — President Bush on Monday resumed his campaign for a tax cut of at least $550 billion, as the Senate prepared to open debate on a bill that falls far short of the White House's goal.

Speaking in Bernalillo, N. M., and then in Omaha, the president touted tax relief as the cure for what Treasury Secretary John W. Snow this weekend termed a "soggy" economy. Bush urged Americans to lobby their congressional representatives to support his proposal.

"I'm here to remind not only you all, but our fellow Americans, that when you raise your voices, the people in Washington tend to listen," he said in his first speech, addressing several thousand employees of a manufacturing firm near Albuquerque.

Bush's recent string of campaign-style appearances to promote his tax cut plan have focused on the home states of moderate Democrats, some of whom are more sympathetic to his proposals than are their party leaders. But even with a handful of Democratic allies, Bush still faces significant hurdles to passing a tax cut bill that costs more than the $350-billion package before the Senate.

Because of a procedural glitch, the Senate may be forced to postpone the start of tax debate from today to Wednesday. But GOP leaders still hope to win approval later this week.

The bill provides $421 billion in tax cuts -- and $71 billion in offsetting tax increases and spending cuts that may come under fire during floor debate. Bush's best hope for expanding the tax cut likely will come later in negotiations between the Senate and the House, which on Friday passed a $550-billion tax cut.

Early last week, Bush traveled to Arkansas in hopes of generating public pressure on Sen. Blanche Lambert Lincoln, a moderate Democrat who sits on the Senate Finance Committee. A few days later, she was the only Democrat on the panel to vote for the bill. But an aide said it was less because of presidential pressure than because the bill's GOP authors agreed to include several provisions important to her low-income constituents.

Bush's trip to Nebraska may help him nail down support from Sen. Ben Nelson, another moderate Democrat. Nelson repeatedly has said he would be willing to support a tax cut larger than $350 billion -- so long as it included aid to financially struggling states. The Senate bill would funnel $20 billion to state and local governments.

Nelson appeared with Bush in Omaha and said afterward that the president "made a great case for ... why we need economic stimulus."

In both New Mexico and Nebraska, Bush spoke with unusual vigor, often raising his voice and thumping the lectern to punctuate his points -- a sharp contrast to his speeches on war with Iraq and to terrorism, which he delivered in understated and even tones.

In Omaha, Bush made a particularly spirited pitch for his troubled proposal to eliminate the individual taxation of corporate dividends. "I want Congress to take this proposition seriously," he said.

Today, Bush is to stop in the home state of another potential Democratic ally, Sen. Evan Bayh of Indiana. Bayh is "open to the idea" of backing tax cuts beyond $350 billion if they are offset, spokesman Mark Kornblau said.

Bayh is scheduled to appear with Bush at a rally in Indianapolis. Also during the day, the president plans to visit tornado-damaged parts of Missouri.

Bush's efforts to line up support from moderate Democrats are, in part, a sign of the fight some members of his own party have waged against a bigger tax cut because of their concern about the federal budget deficit. Two Senate Republicans -- John McCain of Arizona and Lincoln Chafee of Rhode Island -- oppose any cut, and Olympia J. Snowe of Maine and George Voinovich of Ohio have balked at plans exceeding $350 billion.

Responding to these Republicans and other skeptics, Bush increasingly has pushed his plan as crucial to fighting unemployment. In Omaha, he said, "I'm concerned about the deficit, but I'm more concerned about the person looking for a job today."

And in New Mexico, he boiled his argument down to its essence, saying: "The best way to stimulate this economy is to have robust tax relief for the American people."

To a greater degree than previously, Bush linked the sluggish economy to his predecessor, President Clinton. He noted that "in March of 2000, the stock market started to decline." But he did not mention that the steepest decline has occurred under his watch.

He also said that in January 2001 -- the month he took office -- the nation was "in a recession, which meant three quarters of negative growth." Economists, however, officially date the recession's start as March 2001.

Bush's host in New Mexico was MCT Industries, which makes military and commercial vehicles and trailers.

In Omaha, Bush spoke to about 2,000 workers and relatives at Airlite Plastics, a plant that makes plastic containers for consumer goods.

Shortly before Bush arrived, Airlite President Brad Crosby announced that he had reversed a requirement that employees had to make up any time they took off to see the president. Crosby said the employees would get paid regardless of whether they worked, attended Bush's speech or choose to take the day off.

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