Conservatives fear tax-increase deal

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The Bush administration has sent signals since last month's elections that the president is prepared to accept some tax increases on upper-income families, worrying congressional Republicans and fiscal conservative watchdogs who say he will compromise with Democrats to win a legacy accomplishment.

These moves come even as Democrats have pledged to rein in earmarks, winning praise from the same conservative groups that are criticizing Mr. Bush.

The watchdog groups have been demanding that the president repeat his earlier pledges not to raise taxes in order to reform Social Security. But the White House has refused, with officials saying everything is on the table, including tax increases.

"So far, no one in the administration has simply stood up and said, 'We will not raise payroll taxes in any way, shape or form,' " said Pete Sepp, a vice president for the National Taxpayers Union, which led a coalition of several dozen groups to write a letter asking for such an assurance.

Meanwhile, the House's top Republican on tax cuts, outgoing Ways and Means Committee Chairman Bill Thomas, warned last week that the White House has hinted that it will accept a tax increase on higher-income families in order to win accommodations from Democrats.

"I wish I were a bit more comfortable in listening to some of the noises that are currently being made," Mr. Thomas, California Republican, told the American Enterprise Institute, saying he is seeing signs that the administration may be "moving away from hard-fought policies to salvage what you thought you weren't going to get."

"Based upon some statements made by people in prominent positions who deal with money within the administration, comments about the individual top tax rate make me a little nervous," he said.

The White House-congressional split highlights a problem that Mr. Bush is likely to face for the next two years: the increasing division between Mr. Bush and his party as he works to find common ground with Democrats and Republicans work to hold the line on tax cuts and other gains they made on the Republican agenda.

Social Security could be the first test. Since November, Mr. Bush has said everything should be on the table in the effort to fix the program's finances -- a statement in sharp contrast to his declaration after the 2004 elections that "We will not raise payroll taxes to solve this problem."

Asked twice in recent weeks about the president's plans, White House press secretary Tony Snow wouldn't rule tax increases out.