- The Washington Times - Tuesday, May 6, 2003

LITTLE ROCK, Ark. — President Bush directly asked voters for the first time yesterday to pressure Congress into passing the largest possible tax cut as a way of stimulating the lackluster economy.”I would hope you’d call members of your congressional delegation to let them know what you think, to let them know your opinion,” Mr. Bush told a gathering of 2,000 enthusiastic business owners and employees. “Democracy can work, particularly when a lot of people get on the phone, or by e-mail, and just let them know what’s on your mind.”You need to let them know you’re concerned, just like the president’s concerned,” he added. “And you might just remind them that we know whose money we’re talking about in Washington, D.C. It’s the people’s money in the state of Arkansas.”The marked escalation of rhetoric signaled the president’s growing frustration with Congress on the size of a tax cut. Mr. Bush, who has scaled back his proposal from $726 billion to $550 billion, has been stymied by Senate Democrats and several Republicans who want to limit the tax cut.One of several Democrats who Mr. Bush is trying to pressure is Sen. Blanche Lincoln, Arkansas Democrat, a member of the tax-writing Senate Finance Committee. Although she voted for the president’s $1.35 trillion tax cut in 2001, she was balking at both the size of this year’s proposed package and its elimination of double taxation on dividends.A conversion of Mrs. Lincoln, who turned down the president’s invitation to attend yesterday’s speech, would offset the budget vote of one of the two Republican senators who sunk Mr. Bush’s initial plan, George V. Voinovich of Ohio and Olympia J. Snowe of Maine.Two other Republicans — Sens. Lincoln Chaffee of Rhode Island and John McCain of Arizona — have opposed any tax cuts and are not public objects of heavy White House lobbying.A small number of defections would give the president an important victory by allowing him to enact new rate reductions and accelerate old ones. Mr. Bush emphasized yesterday that such cuts would stimulate the economy and reduce unemployment, which last week reached 6 percent, a nine-year high.”We got some troubling economic news,” he said. “This news ought to serve as a clear signal to the United States Congress that we need a bold economic recovery plan, so people in America who want to work can find a job.”The president proposed his latest tax cut package in early January. Although he had been lobbying for its passage ever since, yesterday marked the first time he went over the heads of Congress by imploring voters to apply pressure on their lawmakers.”Contact your elected representatives to let them know how you feel,” Mr. Bush said. “Congress needs to move. They need to move boldly.”The proposal I outlined four months ago was designed to address specific weaknesses in our economy and to remove obstacles that keep companies from hiring workers,” he added. “Those obstacles still exist.”Both houses of Congress were to start work today on tax-cut bills, with the House Ways and Means Committee expected to pass a $550 billion tax bill that last week received tacit endorsement from two Cabinet officials — Treasury Secretary John W. Snow and Commerce Secretary Donald L. Evans.Rep. Bill Thomas, California Republican and Ways and Means chairman, said the bill wouldn’t eliminate “double taxation” but would treat individuals’ income from dividends like capital gains.Individuals currently must pay income tax on dividends, though the money already has been taxed as corporate income.The bill would reduce the top tax rate on capital gains from 20 percent to 15 percent, and the lower rate from 10 percent to 5 percent. The Cabinet secretaries, though saying they still hoped for full elimination of the double tax, were quick to praise the House version for including elements from every part of the president’s original plan, including acceleration of future tax cuts.The House compromise, which is expected to reach the House floor Friday, has the blessing of Republican leaders and almost all members of the Republican Main Street Partnership, a coalition of liberal-leaning Republicans.In the Senate, Republican leaders met yesterday evening to hash out details of their plan. They had committed to passing a $350 billion tax cut but later sought to increase the amount by finding spending reductions or revenue increases elsewhere.Senate Finance Committee Chairman Charles E. Grassley, Iowa Republican, is expected to produce a plan totaling between $425 billion and $450 billion today. His committee has to pass a bill by Thursday, and leaders have pledged to include the other accelerated tax cuts that the president has requested.Senate Republicans still were trying to persuade wavering members who argued that Mr. Bush’s tax cut would exacerbate federal deficits, a point the president addressed in his Little Rock speech yesterday.He blamed the red ink on the recession, which began as Mr. Bush took office.”When the market corrected, the revenues to the Treasury slowed down,” he explained. “The first three quarters of the year 2001 were recessionary; they’re negative growth.”Although the economy has been expanding since then, the president has described the recovery as insufficiently robust.Yesterday marked the second speech on the economy since the president began a five-day trip to California, Texas and Arkansas on Thursday. It was his longest domestic trip in months and longer than his last two foreign trips combined.Mr. Bush, after declaring “victory” in Iraq, has been shifting his attention to the economy, although the subject of Iraq still figures prominently in his speeches.In fact, Mr. Bush said for the first time yesterday that “Saddam Hussein is no more.” He did not explain whether that meant that the former Iraqi dictator was dead or merely out of power.The president also seems more aware of squabbling among Democrats who are vying with each other to challenge him for the White House next year.In an apparent reference to former Vermont Gov. Howard Dean’s recent assertion that the United States would not always have the strongest military in the world, the president yesterday said, “We’re a great military might. We’ll remain that way.”He returned to Washington yesterday for a White House meeting with NATO Secretary-General George Robertson.•Stephen Dinan contributed to this report from Washington.

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