- The Washington Times - Wednesday, January 29, 2003

President Bush last night laid out an ambitious economic and domestic reform agenda aimed at his political base and the nation's major voting blocs, as he began his two-year campaign for a second term.
With the economy in a slump and nagging public doubts about war in Iraq, Mr. Bush devoted much of his State of the Union address to the centerpiece of his presidential agenda: a sweeping tax-cut plan to boost economic growth, business investment and employment.
As he has since announcing his tax-cut proposal earlier this month, Mr. Bush said the best way to spur economic growth is to let workers keep more of their money.
"Jobs are created when the economy grows; the economy grows when Americans have more money to spend and invest; and the best, fairest way to make sure Americans have that money is not to tax it away in the first place," Mr. Bush said.
Of all the proposals in his speech, perhaps the most surprising was to let younger workers put part of their payroll taxes into personal retirement accounts that could be invested in stocks and bonds.
With the stock market falling as a result of fears of war, falling consumer confidence and weak corporate earnings, many observers thought Mr. Bush would put off any discussion of his plan until after 2004. But the president's chief political adviser, Karl Rove, believes it is an idea that resonates with many younger workers and will prove popular in the 2004 election.
If Mr. Bush's speech demonstrated anything, it showed his belief in a mandate for his proposals as a result of the Republican Party's 2002 election victories and his belief that he could demand and get much more out of Congress than he and his advisers anticipated in his first two years in office.
His speech was crafted to appeal strongly to key parts of his political base, as well as to parts of the larger electorate that put him in office in 2000 and supported his party in the November elections. In the speech:
He called for passage of bills to ban partial-birth or late-term abortions and human cloning, proposals strongly supported by pro-life voters and lobbying organizations that are among his most loyal supporters.
He proposed reforming Medicare along the lines of a more market-oriented system to control costs and to offer a prescription drug benefit to blunt the more expensive plans sought by Democrats.
Postelection surveys showed that Republicans did slightly better than Democrats in winning the votes of seniors, and this plan was another effort to consolidate those gains.
He asked for medical liability reform to help stem the tide of lawsuits against doctors. This is a major issue in the health care industry, as some doctors are leaving the profession because of high malpractice insurance rates.
In proposing a major medical aid program to deal with the AIDS epidemic in Africa and the Caribbean, Mr. Bush also was attempting to reach out to the black community, the Democrats' most loyal voting bloc.
"Seldom has history offered a greater opportunity to do so much for so many," he said, adding that the plan will help "turn the tide against AIDS in the most afflicted nations of Africa and the Caribbean."
The "Emergency Plan for AIDS Relief," totaling $15 billion over five years, will help prevent 7 million HIV infections, give life-extending drugs to 2 million people, and provide care for millions with the illness or children orphaned by it, he said.
At the same time, his tax cuts contained something for each of the key voter constituencies whose support Mr. Bush and his party were winning in increasing numbers.
His plan to end the tax on stock dividends will largely benefit older, retired voters, 10 million of whom receive much of their income from dividends.
Mr. Bush also polls strongly among married couples and families with children. His proposals to cut the tax rates for two-earner working couples and raise the per-child tax credit retroactively this year by $400 to $1,000 is aimed at these two large voting blocs.
White House advisers said in background briefings yesterday that the tax-cut proposals would help the economy immediately.
Weighing in at nearly $700 billion in tax cuts, Mr. Bush's economic advisers and his supporters in the business community have mounted a major lobbying drive to get the plan passed early this spring, if not sooner.
"This is going to have a tremendous impact on the economy over the next two years, especially the reduction in income-tax-rate cuts," said Martin Anderson, one of Mr. Bush's outside advisers who helped put together his original tax plan in 2001.
Democrats continued to attack his plan as a giveaway to the rich that would deepen the deficits and divert money that they said should be used for aid to the states, public works programs to provide jobs and larger social welfare programs.
"The triple threat of war, terrorism and recession are combining to make Americans unsure about their future and unclear about the course our nation is taking," said Senate Minority Leader Tom Daschle of South Dakota.
In the Democrats' response to Mr. Bush's speech, Gov. Gary Locke of Washington accused the president of putting tax cuts and Iraq before the nation's needs and ignoring a financial crisis that had slashed state tax revenues and led to deep spending cuts.
"To be strong abroad, we have to be strong at home. People are obviously worried about terrorism and Iraq, but those concerns should not overshadow the pressing needs of the people here at home," Mr. Locke said.

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