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Bush pushes for large tax cut this year

President Bush
Bush: "The American economy is like a great athlete at the end of the first leg of a long, long race -- somewhat winded but fundamentally strong."  

KALAMAZOO, Michigan (CNN) -- President Bush on Tuesday took issue with a Democratic push for an immediate tax rebate, saying the "winded but fundamentally strong" U.S. economy needs more than a one-time tax cut.

"Immediate tax relief is good news. But tax relief that gets yanked away next year is not such good news," said Bush in a speech at the Kalamazoo Chamber of Commerce, outlining his 10-year, $1.6 trillion tax cut and views of the economy.

Bush repeatedly cited the decline of the Dow Jones and Nasdaq stock averages as a way of emphasizing the nation's economic slowdown started well before he took office.

Saying the economy needs an immediate stimulus, the president called for a tax cut retroactive to January 1. He did not give specific figures, but it was clear he wants a large tax cut for this year.

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CNN's Major Garrett says the White House is trying for a more positive tone in the face of a Democratic offensive

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CNN's Wolf Blitzer reports on Bush's push for a tax cut while Democrats float their own plan

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Democrats have made headway in recent days with proposals for an immediate $60 billion, one-time tax rebate of $300 per individual taxpayer. It would also reduce the 15 percent tax rate to 10 percent.

The Bush plan offers immediate, but also ongoing tax cuts. Bush said he doesn't object to the Democrats' immediate tax relief plan to "get cash into the consumers' hands as swiftly as possible," but more is needed.

"Our economy needs more than a pick-me-up, more than a one-time boost," he said. "We must put more money in the hands of consumers in the short term, and restore confidence and optimism in the long term."

The president said his economic plan will lay the groundwork for future economic growth, citing tax cuts by presidents Kennedy and Reagan that helped pull the country out of economic doldrums.

Earlier Tuesday, Treasury Secretary Paul O'Neill argued against the Democrat tax rebate.

"Some have suggested we send a rebate to the taxpayers now and stop there. That's not good enough," he told a group of economists. "If we want to change consumption patterns, we need to make a permanent change in people's tax burdens."



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