By
The Associated Press
WASHINGTON - After two weeks of warm-ups in which he pushed education and religious-based help plans, President Bush is ready to launch the sales job for the centerpiece of his economic program - a sweeping $1.6 trillion, 10-year tax cut.
The White House has a full schedule of activities this week, starting today when Bush was set to appear with a carefully selected group of American families, much like he did during the campaign, to illustrate the benefits of reducing individual tax rates.
He planned to meet tomorrow with small business owners and on Wednesday scheduled a White House reunion with his tax families from the campaign trail. The outlines of his tax program are to be formally sent Thursday to Congress.
One decision the administration is likely to make before sending the plan to Congress is whether to speed up the tax relief by making it retroactive to the first of this year as a way of fighting off a recession.
"A tax cut now will stimulate our economy and create jobs," Bush said over the weekend. He pointed to what he called "troubling" economic news of rising energy prices, job layoffs and falling consumer confidence that the president said the government must combat.
"He wants to see the tax cut that he ran on pass, not just because he ran on it, but because it's the best thing we can do for the economy," Bush's chief economic adviser, Lawrence Lindsey, said on "Fox News Sunday."
Whether Bush succeeds could hinge on congressional Democrats and corporate lobbyists, two groups already putting together their own, quite different versions of a tax cut bill.
Attracting Democratic support is crucial for Bush, given the Republicans' narrow control of Congress.
Democrats lost a key ally when Federal Reserve Chairman Alan Greenspan said last month that the surplus estimates had grown so large that he now believed there was enough money to accomplish his preferred objective of paying down the national debt as well as providing tax relief.
While more Democrats have been joining the tax cut bandwagon, they are trying to refashion the Bush program so more money goes to lower-income taxpayers and less to the wealthy. They also want to trim the size of the overall program, contending it is not prudent to give away so much in surpluses that may never materialize.
"The people who need the most help get the least help, and we've seen this before," said Senate Democratic leader Tom Daschle of South Dakota. "The last time Congress passed a big tax cut, in 1981, the wealthiest Americans got most of the benefits, and working families got stuck with the bill."
The corporate lobbyists, meanwhile, will be working to expand it the tax cut - possibly by $600 billion, to include tax breaks for their businesses.
Administration officials insist they are not changing the program that Bush campaigned on, which has few provisions for big business. "No more, no less," Lindsey said yesterday, when asked if the $1.6 trillion figure was correct.
Still, corporate lobbyists are hoping that the millions of dollars in campaign donations they made last year to both parties will help persuade Congress.
Congressional veterans fear the same type of tax-cutting frenzy that occurred in 1981. President Reagan pushed Congress for sweeping across-the-board cuts for individuals, giving corporations an opening to win passage for billions of dollars in tax relief for them. The result was huge tax cuts that contributed to quadrupling the national debt.
"I really fear we could lose control of this train," said Rep. Robert Matsui, D-Calif., a member of the House Ways and Means Committee who was involved in the 1981 battle.
Many private analysts also are worried, contending the rush to cut taxes could grow even wilder in an era of huge surpluses compared with the restrictions imposed in the past era of deficits.
The Congressional Budget Office last week significantly boosted its estimate of the 10-year surplus to $5.6 trillion, including $3.12 trillion outside of Social Security that both parties view as fair game for tax cuts and spending increases.
"There is money on the table and everybody is going to go after it," predicted David Wyss, chief economist for Standard & Poor's Corp. "It is going to be very hard to control the feeding frenzy in Congress."
But Mark Bloomfield, the head of the American Council for Capital Formation, a business tax cut lobbying group, said his members wanted tax relief to make America more competitive but he would "not be part of any project that is fiscally irresponsible."
While Democrats have yet to present their alternative to the Bush budget, Sen. Kent Conrad, D-N.D., is circulating his own proposal: one-third of the $3.12 trillion non-Social Security surplus would go to tax relief; one-third for new domestic needs such as providing prescription drug benefits to the elderly; and one-third to fixing the long-range problems in Social Security and Medicare.
Conrad said Bush's "plan goes too far and puts at risk ... this remarkable economy."
Robert Reischauer, the former head of the Congressional Budget Office, said the upcoming battle is likely to go in one of two ways: Bush will get something close to a $1 trillion tax cut, slightly less than he is seeking, or he will get double that amount.
"If it turns into an unrestrained feeding frenzy, the tax cut could go to $2 trillion where over 60 percent of Congress would vote for it because all of them will have had their needs met," he said.
