- The Washington Times - Thursday, January 29, 2004

MERRIMACK, N.H. — President Bush yesterday said allowing temporary tax cuts to expire would be tantamount to a tax increase on all Americans and would come at exactly the wrong time for the rebounding economy.

In a quick campaign-style swing through a state that just conducted the nation’s first primary, the president talked up the economy and took a bit of credit for the recent uptick.

“The tax relief we passed was essential to get the economy going,” he told hundreds gathered in a small dining room at Fidelity Investments Consulting outside Manchester. “It’s working. The economy’s growing. People are finding work. There’s an excitement in our economy. And the tax relief we passed made sense then, it makes sense now, and Congress needs to make this tax relief permanent.”

Congress set a 10-year limit last year when it approved a $330 billion tax cut, less than half of what Mr. Bush originally proposed. The child-tax credit phases down in 2005, making this the last year parents will get an expanded deduction of $1,000 per child. Next year, the deduction will be $700, meaning taxpayers will be hit with a $300 increase per child unless Congress extends the tax relief.

“That means the benefits of the tax relief start getting sucked out of the economy at the exact wrong time,” Mr. Bush said. “We need to keep this money in the hands of the people of America.”

The economy, always of interest to voters as an election nears, is once again atop the list of issues, according to polls in New Hampshire and Iowa. In several surveys, health care was the top concern among voters, but in nearly all polls, the war in Iraq placed far down the list. A poll this week in New Hampshire found that just one in 10 voters felt the Iraq war was the most important issue in the 2004 election.

The Democratic candidates who have called for a repeal of all Bush tax cuts have not fared well in the early stages of the presidential primary season. Former Vermont Gov. Howard Dean, who wants to strip Americans of the tax cuts and use the money to pay for health care and homeland security programs, has faltered badly, coming in third in Iowa and a distant second here on Tuesday. Rep. Richard A. Gephardt of Missouri, who echoed Mr. Dean’s call for a full repeal, has dropped out of the race after a dismal showing in Iowa.

The front-runner for the Democratic nomination, Sen. John Kerry of Massachusetts, has called the proposal to roll back the tax cuts on all income levels the equivalent of a tax increase for the middle class. On his campaign stops, he has repeatedly asserted that such a move would hurt those who can least afford it.

Mr. Bush said his across-the-board tax cut was the fair way to help Americans. “We’ve reduced taxes on everybody, as opposed to trying to pick or choose winners in the political debate. Everybody got tax relief,” he said.

The president, clearly in campaign mode despite protestations by the White House that the New Hampshire trip — as well as a trip Monday to Arkansas, the home state of Democratic presidential candidate Wesley Clark — had no political overtones.

Mr. Bush even made an impromptu stop reminiscent of his last run through New Hampshire as a Republican candidate for president. On his way back to the airport en route to Connecticut for a fund-raiser, Mr. Bush stopped at the Swan Chocolate store, surprising customers and workers alike.

“I expect people in the national press corps to leave some cash behind,” Mr. Bush said.

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