Bush urges quick $60 billion in tax cuts
WASHINGTON (CNN) -- President Bush urged Congress on Friday to enact at least $60 billion in new tax cuts "as quickly as possible," rather than rely on additional federal spending to pump more money into the slumping economy.
"In order to stimulate the economy, Congress doesn't need to spend any more money. What they need to do is to cut taxes," Bush said. "The American people expect us to act, and here's a way for us to act."
However, initial reaction from some leading Capitol Hill Democrats was cool.
"I think it is too early to be putting numbers on spending versus tax reduction," said Sen. Max Baucus, D-Montana, chairman of the Senate Finance Committee, in a written statement.
A senior Democratic aide told CNN that the president's proposal is "not very bipartisan."
"Hopefully, we'll negotiate a package we can all agree on," the aide said.
Senate Majority Leader Tom Daschle also voiced concerns about bipartisanship.
"Unfortunately, I fear that some of the more extreme voices in the Congress are now pressuring the administration to take a more divisive approach to the stimulus legislation," the South Dakota Democrat said in a statement.
Bush noted that Congress and the White House have already agreed on $60 billion in additional spending in the wake of the September 11 terrorist attacks, including money for disaster relief, additional security, bailing out the airline industry and extending unemployment coverage for affected workers.
He said taxes should be cut by an amount at least as large "or a little bit greater."
As Congress and the White House continue to negotiate details of an economic stimulus package, some Republicans on Capitol Hill have been pushing for Bush to draw a line on further spending, favored by some Democrats, and push instead for tax cuts, more palatable to the GOP rank-and-file.
The tax reductions Bush wants include:
-- Accelerating cuts in income tax rates approved earlier this year but not scheduled to take effect until 2004.
-- Providing more tax relief for low and moderate income Americans. Bush did not set out details of how this might be achieved, although cuts or rebates of payroll taxes have been discussed on Capitol Hill.
-- Allowing businesses to take "enhanced expensing" of capital spending, which could speed up the pace of business investment in new equipment.
-- Eliminating the alternative minimum tax for corporations, a move that is likely to be particularly controversial with Democrats.
A spokesman for one leading Democrat, Sen. Edward Kennedy of Massachusetts, said the "top priority" of any stimulus package must be "to help average Americans."
"We need an economic recovery program that provides more help for workers and not tax breaks for corporations and wealthy Americans," said Kennedy spokesman Jim Manley.
In an interview with radio reporters Friday prior to the president's announcement, House Minority Leader Dick Gephardt, D-Missouri, said he wants Congress to provide more financial help for unemployed workers, including continuing their health care coverage.
"Every dollar that you give in those benefits gets spent immediately and helps the economy move forward and recover," Gephardt said. "I don't know what that ultimately will cost, but I think that is a necessary item. And if that claims a good deal of money, I think that's the best money we can spend."
Bush outlined his tax cut proposal after meeting at the White House with Treasury Secretary Paul O'Neill, who had been on Capitol Hill discussing the stimulus package with congressional leaders. Bush said O'Neill brought him "encouraging news" that Congress is willing to work quickly on a package.
-- CNN White House Correspondent Major Garrett contributed to this report.
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