Bush Presses for Tax Cut

Jan. 4 -- President-elect George W. Bush expressed newfound confidence in the economy this afternoon, but said he still intends to push Congress for his proposed $1.6 trillion tax cut.

“I am very optimistic about our position in the world,” Bush said after the end of a two-day summit with business leaders in Austin, Texas. “We’re concerned about the short-term economic news, but long-term I’m optimistic.”

But after weeks of warning about an impending economic downturn, Bush said his tax cut is “going to be necessary to help keep this economy strong.”

Upholding a Campaign Pledge

In pushing for across-the-board reductions in income tax rates, plus a possible repeal of the estate tax and a reduction in rates for married couples, the president-elect is not only attempting to keep a major campaign promise, but to satisfy conservative Republicans.

Bush said today he is “confident the size of the tax relief plan” is appropriate. But with estimates varying about the size of the blossoming budget surplus, Bush will face pressure from Democrats and Republicans in Congress to horse-trade on the size and shape of the cuts.

“I think everybody’s going to be looking for a combination of additional spending plus a tax cut,” says political analyst Stu Rothenberg. “Ultimately it will be a package.”

And Bush has pledged additional spending measures that would also eat into the surplus.

“There has to be more spending on education,” adds Rothenberg. “He’s committed himself to that.”

White House budget projections released last week show the surplus at roughly $2 trillion, after Social Security and Medicare are accounted for, but some analysts dispute those figures.

Changing Rationale, But the Plan Remains the Same

Even as Bush remains firmly committed to the tax cut, his rationale for enacting it has changed. During the campaign, when economic projections were rosier, Bush said a reduction in the basic income tax rates would be a way of giving citizens money that was rightfully theirs.