Bush urges tax cuts, not more spending

WASHINGTON -- President Bush urged Congress on Friday to approve at least $60 billion in fresh tax cuts to boost the staggering economy without resorting to the broad new government spending sought by many Democrats.

The announcement followed a Thursday night meeting on the White House's Truman Balcony during which House Republican leaders described for Bush a growing concern among conservatives that he appeared too open to Democratic spending proposals ranging from health insurance assistance to railroad construction.

At the meeting, which a senior White House official characterized as "brutally frank," GOP leaders said they believed Bush's statements were being misinterpreted by many in Congress and advised him to communicate his thinking on the stimulus plan more clearly, said one participant who spoke on condition of anonymity.

Bush, flanked by his top economic advisers in the White House Rose Garden, said Friday the government is already responding with about $60 billion in spending to the aftermath of the Sept. 11 terrorist attacks, including his proposal to extend unemployment benefits by 13 weeks.

The president called for additional tax cuts totaling about the same $60 billion.

"In order to stimulate the economy, Congress doesn't need to spend any more money. What they need to do is cut taxes," Bush said.

Panel has green light

House Majority Leader Dick Armey, R-Texas, said the tax-writing Ways and Means Committee was given a green light to begin assembling a package of up to $75 billion without waiting for a negotiated agreement with Democrats and the Senate. The panel's chairman, GOP Rep. Bill Thomas of California, said work could begin as early as next week.

Democrats responded with dismay, saying that would virtually ensure a partisan outcome.

"These people have a hidden agenda," said Rep. Charles Rangel of New York, senior Democrat on the Ways and Means Committee. "They think they can dust off anything they want and wrap the American flag around it."

The president made his clearest statement yet on the components of his plan, which would include accelerating some or all of the income tax rate cuts now set to take effect in 2004 and 2006 as part of the 10-year, $1.35 trillion tax relief measure enacted earlier this year.

Treasury Secretary Paul O'Neill has proposed moving the 1 percentage point reduction in the 27 percent income tax rate from 2004 to 2002, a Treasury official said.