- The Washington Times - Monday, November 25, 2002

President Bush will use his election mandate to push for an economic stimulus bill next year that likely will call for speeding up his tax cuts, expanding IRA and 401(k) plans and giving businesses new incentives to grow, according to administration officials and outside advisers.
The White House is also considering a range of other domestic initiatives more ambitious than it had envisioned before Mr. Bush broke historical precedents in midterm elections and led his party to full control of Congress.
"Maybe we can now go after some things that we thought were tougher nuts to crack, and that we have been putting off. With the mandate from this election, the president can go after two or three more things in the new Congress," a White House official said in an interview.
"The game has changed so much [since the elections]. Everybody had to take a step back and realize what is possible now. It's a matter of reprioritizing what you can do in this new political environment that you could not do in the previous environment," he said.
At the top of Mr. Bush's agenda is some kind of stimulus plan to get the economy growing faster over the next two years. Administration officials say the president has not signed off on the provisions in an economic growth bill, but they say some form of economic stimulus bill is a certainty and that a proposal to accelerate the next stage of income tax cuts is the likeliest approach.
"There will be a stimulus package of some kind, I have no doubt about that," said Bruce Josten, chief lobbyist for the U.S. Chamber of Commerce, who has attended White House legislative policy sessions with other business advisers.
"You will see making the tax cuts permanent, tax cuts for IRAs and 401(k)s for investors and tax cuts for business expenses to buy equipment and expand," said Grover Norquist, president of Americans for Tax Reform, who also advises the White House.
With many business economists pointing to signs that the economy is slowing down in the last quarter and could grow only modestly in the first quarter of the new year, the need to stoke the economy's growth rate has become a primary domestic focus of the administration, outside of homeland defense.
Lawrence Lindsey, the president's economic adviser, declined to say what he thought Mr. Bush would do, but he painted a mixed picture of the nation's economy.
"On the good news side, productivity seems to be very strong, and that suggests growth long-term is likely to be at a faster rate," Mr. Lindsey said in an interview. "On the other side, we face the uncertainties of war and terrorism, and that has economic and psychological effects that are very difficult to evaluate or predict.
"Uncertainty is high," he said. Asked whether he thought the president would seek a stimulus bill as an insurance policy against any future economic downturn as a result of a war in Iraq, he said, "We may."
Meanwhile, administration officials say that making some or all of the tax cuts effective earlier than the 2001 tax-cut law requires is at the top of their recommendations to the president, in addition to making the tax cuts permanent.
The next tax-rate cuts are scheduled to take effect in January 2004, followed by a third reduction in 2006.
"Accelerating the tax cuts are very high on our list," said an administration economic adviser who spoke on the condition of anonymity.
Other officials said they expected the plan to contain additional incentives for investors whose retirement plans were hurt badly over the past three years.
The Bush tax cuts will gradually raise the contribution limits for IRAs and 401(k), but there has been growing support among Republicans in Congress to accelerate and expand the changes to help investors boost their retirement savings. Other proposals call for raising the amount of stock losses they can deduct from their tax bills and delaying the time when retirees must draw income from their pension funds.
Other economic proposals before the president would cut the tax on stock dividends to make stocks more attractive investments, and reduce the capital-gains tax rate, though insiders do not see the White House proposing either one this year because officials fear the Democrats will attack them as giveaways to the rich.
But some conservative policy analysts think that Mr. Bush can afford to take chances this year on issues like these because of the mandate he won in the elections.
"The one lesson that came out of the elections is that the Democrats' class warfare does not have the bite it used to," said Michael Franc, a vice president at the Heritage Foundation.
"Aside from making the tax cuts permanent, the dividends issue is the big enchilada for tax cut reformers," he said.
Mr. Bush is also expected to call for action on several remaining pieces of his agenda that Congress has not passed, including an energy bill to permit drilling in the Arctic National Wildlife Refuge, legal reform to restrict excessive claims in lawsuits, bankruptcy reform, a program to give grants to faith-based organizations to help the needy, and a prescription drug benefit tied to private insurance.
The president also is likely to renew his request for an income-tax credit to provide health care for the uninsured, a proposal he made in his campaign in 2000 and included in this year's budget request, his supporters said.
With former Vice President Al Gore calling for a single-payer system, under which the government would pay for all health care costs for the uninsured, the administration wants to make sure that a more market-oriented plan is part of any future health care debate, some advisers said.


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