WASHINGTON — Only days before President Bush is set to deliver his election-year State of the Union address, a quiet struggle has broken out between conservative activists who want Bush to embrace sweeping new tax breaks and moderates who advocate a more cautious approach of seeking to consolidate his tax cut victories of the last three years.
Early indications are that the moderates are carrying the day.
For months, activists and some Republican Party officials have pushed for Bush to embrace the notion of an "ownership society" -- a set of tax reduction and related policies aimed at helping Americans build assets, from homes to tax-advantaged savings and brokerage accounts. These activists have argued that the theme plays well with voters, helps explain the administration's tax-cut-heavy policies, and could usher in a generation of GOP political dominance.
But in his first full-dress speech of the election season -- Tuesday night's televised address to a joint session of Congress -- the president will not use the phrase or mention the tax breaks the conservatives have touted, a senior White House official said Thursday.
"I'd steer you ... away from 'ownership society,' " said the official. "I don't want you to believe it's not important, but I wouldn't describe the speech that way."
The official said the administration would include one of the tax breaks conservatives have been promoting -- for retirement savings -- in its fiscal 2005 budget plan, due out in two weeks. But he made no mention of two others -- for so-called lifetime savings accounts and for a new employer-based retirement savings account.
Activists such as Grover Norquist, president of Americans for Tax Reform, said word of the White House decision not to use the phrase "ownership society" or include mention of the tax breaks hardly ends the matter.
Contradicting the White House official, Norquist said he had been assured that the proposals for retirement savings, lifetime savings and new employer-based retirement accounts would be in the budget.
"This gives us the maneuvering room we need. We will make this an issue," he said. Norquist is thought to have the ear of Bush political advisor Karl Rove and is considered widely influential in Washington.
Nevertheless, the decision appears to be a substantial setback for conservatives.
