- The Washington Times - Sunday, May 4, 2003


  The White House sent up a trial balloon this week in a move to break the congressional stalemate that is stalling President Bush’s job-creating, economic stimulus plan.
  In an attempt to squeeze Mr. Bush’s pro-growth tax-cut package through a smaller budgetary window approved by Congress, the administration is suggesting it can stretch out elimination of the dividends tax and reducing the top income tax rate from 38.6 percent to 35 percent this year.
   Both ideas, offered by Treasury Secretary John Snow in an interview with the Wall Street Journal, would lower the near-term cost of Mr. Bush’s tax cuts to less than $550 billion. That’s the tax-cut ceiling the House approved for the fiscal 2004 budget year.
  All of Mr. Bush’s top tax cut priorities would be achieved over time, Mr. Snow said. “You just don’t get there as fast.”
  As I reported two weeks ago (well before last week’s concessions by the administration), the White House is willing to accept the lower, but still-substantial $550 billion target, though not the anemic $350 billion set by the Senate. The question now is finding a way to fit most of Bush’s top tax cuts, originally budgeted at $726 billion, into a smaller budget box.
  Mr. Snow’s additional concessions so early in the legislative game, before either House has begun drafting a tax-cut bill, caught the president’s tax cut allies by surprise. A small army of administration officials and a massive business-led Tax Cut Coalition was in the midst of a nationwide lobbying drive to build grass-roots support for Mr. Bush’s plan during the congressional recess. “This is no time to be seen going South on that plan,” a business lobbyist told me.
  A flurry of phone calls between the White House and Mr. Snow’s office Monday, when his interview appeared on the Journal’s front page, led to a hastily drafted statement from Mr. Snow’s spokesman Rob Nichols.
  Mr. Bush is “committed to a jobs and growth package of at least $550 billion in tax relief that includes all the elements the president has proposed, including 100 percent exclusion of the double tax on dividends and all the tax rate reductions already approved by Congress in 2001,” the statement said.
   But Mr. Nichols also pointed out that “There are many ways to achieve the president’s priorities…. “
   One of those ways will be offered by Rep. Jim McCrery of Louisiana who chairs the Ways and Means subcommittee on select revenue measures. His bill would include all of Mr. Bush’s dividend plan and all of the accelerated income tax cuts. It would cost $522 billion over 10 years.
   The most politically popular features of Mr. Bush’s package — cutting the marriage penalty tax faster, doubling the child tax credit and raising the small business investment tax break — could be offered later as separate bills. Republican leaders think it would be very difficult for Senate Democrats to vote against them even though they would add to the total tax cut costs.
   However Mr. Bush’s tax cuts are reconfigured, several things are clear at this point in the tax cut battle to come.
   First, it is not a question of if there will be accelerated tax cuts but when and how much. Both houses will pass tax cuts within their budget targets and it will all come down to the compromise figure that emerges from a House-Senate conference, something well north of $350 billion but less than $550 billion.
  Bear in mind, we are talking here about accelerating the $1.3 trillion in tax cuts passed in Mr. Bush’s first year. This will still be a lot of stimulus over a 10-year period.
  Second, Mr. Bush is at the peak of his political powers, after winning full control of Congress and two back-to-back wars in Afghanistan and Iraq. He has a comfortable 72 percent job-approval rating that rose slightly this month, according to a Pew Research Center survey of nearly 1,000 Americans between April 10 and April 16.
  The GOP’s approval ratings are also up, Pew reports: 63 percent of Americans say they have a favorable view of the Republicans, while 57 percent say the same about the Democrats.
  Third, unlike his father, Mr. Bush has a plan to revive the U.S. economy and he will be seen aggressively campaigning for its enactment.
  Americans understand that a lot of factors have led to the economy’s weak performance that have had nothing to do with Mr. Bush’s fiscal policies: the bursting-bubble that ended the fraudulent excesses of the Clinton ‘90s, the terrorist attacks in 2001, the corporate accounting scandals that had their roots in the ‘90s, and the war in Iraq to combat terrorism.
  But Americans do not want to hear a lot of excuses either. They want solutions and results. They want their president fighting for them on pocketbook issues.
  This week the president was seen battling for his tax-cutting jobs plan in Ohio and elsewhere, while the Democrats are opposing it without a visible growth plan of their own. Mr. Bush occupies the high moral ground in this fight.
  
  Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.
  


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