- The Washington Times - Friday, September 7, 2001

House Republicans yesterday proposed an economic growth package, including capital gains tax cuts, amid new internal polling that shows the public losing confidence in the direction the nation is headed.

"We are committing to get this economy back up on its feet," said House Majority Leader Dick Armey, Texas Republican.

Republican lawmakers, many of whom are worried about the slumping economy costing them control of the House next year, held a closed-door meeting at the Capitol to discuss trimming capital gains tax rates and holding the line on federal spending.

Speaker J. Dennis Hastert said Republicans even would consider across-the-board budget cuts if necessary to protect the Social Security surplus from being spent on other programs.

New polling for the House Republicans shows that Social Security has risen to become the third-highest concern of voters, from 8 percent in July to 15 percent in late August, when the government reported the non-Social Security surplus had essentially dwindled to zero.

But House Republicans got little help from their Senate counterparts yesterday on the Social Security issue. Sen. Pete V. Domenici, New Mexico Republican and ranking member of the Budget Committee, said there is "no reason" to keep the Social Security surplus locked away from other uses.

"There is no reason in the world that you should look at that [surplus] for only one purpose, and that is to pay the debt down," Mr. Domenici said at a hearing. "What's wrong with looking at it for education if you need education now? What's wrong with looking at it if you need defense now?"

Mr. Bush dismissed such talk yesterday.

"We can work together to avoid dipping into Social Security," said Mr. Bush, with Mexican President Vicente Fox in Toledo, Ohio. "Of course, I've always got the ultimate way to make sure we bring fiscal sanity into Washington. That's what we call a veto."

Senate Democrats nevertheless again accused the White House of risking Social Security funds.

"This is more than just an accounting issue," said Senate Majority Leader Tom Daschle. "This is a moral issue. We said we weren't going to do it."

Pointing to a chart depicting the budget borrowing $2 billion from Social Security in fiscal 2002, Mr. Daschle, South Dakota Democrat, said "this is going to be the dominant issue for the foreseeable future."

The latest New Models survey by pollster Dave Winston shows that 44 percent believe the nation is on the "wrong track," up from 39 percent in July and 33 percent in April. Forty percent say the country is headed in the right direction, down from 47 percent in July and 50 percent in April.

One Republican source said lawmakers "went nuts" Wednesday night when they saw how bad the latest poll looks for them — House Republicans are six percentage points behind Democrats in generic polling.

"The polls are not great right now," Mr. Davis said. "You've got to get the economic situation moving back in the right direction — that's numero uno."

To promote their growth package, House and Senate Republican leaders also met with President Bush at the White House yesterday and said Mr. Bush was more receptive to the capital gains proposal than earlier this week.

"The inference was that if Congress passes it, he'll sign it," one Republican said.

Republican lawmakers are anxious, on the heels of the surplus debate and the anemic stock market, to portray themselves as helping the economy and to characterize Democrats as holding no answers.

Many Republicans believe that limiting the increase in federal spending in fiscal 2002 must be an integral part of their plan.

During yesterday's private meeting of House Republicans, Rep. Nancy L. Johnson, Connecticut Republican, went so far as to demand "no bull" from House Appropriations Committee Chairman C.W. Bill Young of Florida to her question of whether the House will hold discretionary spending to $679 billion, about 5.9 percent above last year. Mr. Young assured her that he would do so.

* Bill Sammon contributed to this report.

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