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Bush says he might consider tax-cut 'triggers'


PORTLAND, Maine (CNN) -- President Bush pitched his budget and tax plans in Maine Friday as the House of Representatives prepared to debate two pivotal bills next week.

Bush's trip to Maine was among several he is making to states whose senators might need to be persuaded to fall in line with the Senate's GOP leadership when his $1.6 trillion, 10-year tax relief package comes to a vote later this spring. Targeted senators have included Democrats as well as moderate Republicans.

The targets in Maine are the state's two moderate Republican senators, Olympia Snowe and Susan Collins, who continue to express reservations about the size and scope of the cut. Both senators traveled with Bush to Portland early Friday.

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Snowe has expressed particular concern about the tax package, saying that "triggers" may be necessary to halt the tax cuts if the economy deteriorates.

Bush seemed to signal -- for the first time -- that he may be open to discussing triggers, which would take hold if the projected $5.6 trillion federal government surplus upon which Republicans are counting does not materialize.

"There's a lot of ideas now being floated out in the Congress, and I'm open-minded to any good idea," said Bush, who previously has said he is against the notion of triggers on tax cuts.

A tax bill likely based on Bush's long-held view that the economy can be jump-started by a $1.6 trillion package may be scheduled for Senate consideration sometime in May.

The Senate, evenly divided between 50 Democrats and 50 Republicans, is destined to be a fierce battleground as the issues of tax relief and use of the projected surplus are considered, and Bush needs all the help he can get.

"Let's be responsible with the people's money," Bush told the appreciative Portland crowd, adding of Snowe and Collins: "Olympia and Susan are smart, capable women who aren't afraid to speak their mind even to the president of the United States. I view them as strong allies and good friends."

Bush ventures to Montana, Missouri and Michigan next week to keep the pressure on Senate lawmakers.

The president has had a comparatively easier time with the House, where a $958 billion bill that would provide an across-the-board cut by restructuring tax rates passed earlier this month.

A bill to eliminate the so-called marriage penalty and double child tax credits hits the House floor next week, as does the House's fiscal year 2002 budget resolution, which would move the Republicans another step closer toward implementing their tax cuts, if passed.

Although much of Washington's attention has focused on the contours of the Bush tax cut, White House operatives know their first and most important battle is over the budget blueprint.

The budget resolution closely resembled the 207-page budget outline Bush sent to Congress in February. The House will take up the legislation next Wednesday.

Busy in the House

Bush and Vice President Dick Cheney are lobbying key House Republicans hard to ensure passage of the budget blueprint next week, according to senior White House and congressional sources.

Bush met at the White House on Thursday with Rep. Larry Combest, R-Texas, chairman of the House Agriculture Committee, assuring him that money would be found to meet agriculture needs in the president's budget, according to congressional sources.

Bush's budget outline seeks a $1.5 billion cut in Agriculture Department funding from last year's total allocations. Combest had been lobbying GOP leaders to insert specific language in the budget resolution identifying an $8 billion to $9 billion boost in agriculture spending over last year's allocations of $19.4 billion.

White House officials, including budget director Mitch Daniels, have tried to reassure Combest and other farm Republicans that Bush's $1.4 trillion "contingency" fund could provide needed farm funding, but Combest wanted a personal assurance from the president before dropping his request for a specific farm budget number.

Cheney has been lobbying senior House Republicans on defense committees all week and making similar promises. House Armed Services Committee Chairman Bob Stump, R-Arizona, had also sought an increase of $8 billion to $9 billion in the 2002 budget for defense spending.

Cheney spoke with Stump and other Republicans, among them Duncan Hunter, R-California, and Floyd Spence, R-South Carolina, both considered "defense hawks."

GOP leaders and the White House want the budget blueprint to give them maximum flexibility to make spending decisions. That is why they resisted efforts to place precise spending numbers in the resolution.

Hard numbers tend to drive future policy, and as congressional sources pointed out, setting in place guaranteed $8 billion or $9 billion increases could inflate agriculture and defense spending for years to come, squeezing Bush's phased-in tax cuts in future years.

"We've had to do a lot of hand-holding," said one senior official. "Members want to protect their interests, but we want to protect all of the president's priorities."

The intervention of the president and vice president underscore how important the budget document is for the White House. Officials know they will win almost no support from House Democrats. Every Republican vote is crucial and a rebellion among defense or farm-state Republicans would kill the bill, White House officials said.

The Senate is due to vote on its blueprint in the first week of April. Similar concerns have been expressed there over defense, agriculture and veterans spending but the president and vice president have yet to intervene, according to White House and congressional sources.

Departure from Bush priorities

The House budget resolution, which passed the House Budget Committee on a party-line vote Wednesday night, is non-binding, meaning the president does not sign it into law. It does, however, lay out the parameters for the opening of the appropriations season.

The House's 13 appropriations subcommittees set the spending levels for each government department, agency and program, and the president must sign their final 13 bills into law, completing the budget process -- at least theoretically -- by October 1, the beginning of the next fiscal year.

The Budget Committee's plan leaves room for $1.62 trillion in tax cuts over the next 10 years and calls for a review this summer to see if larger-than-expected surpluses allow bigger tax rollbacks.

In a departure from Bush's goals, however, the resolution would grow the tax cuts offered by the Bush administration next year by a factor of two.

Bush has proposed tax cuts totaling some $31 billion next year. The committee is suggesting $64 billion, an aide said.

The Republican budget plan also would provide $22 billion more than the $165 billion the president proposed in tax cuts for 2003 and 2004, reducing tax cuts planned for later years to reconcile some of the numbers.

Calls for similar conduct have been heard out of the Senate, where Republicans, including Budget Committee Chairman Pete Domenici, New Mexico, said Thursday and Friday that the greater benefit of the tax package need to be granted to the American people -- meaning a tax cut of some $60 billion next year.

Bush said Friday he had heard their recommendations, and would take them under advisement, providing no one suggested expanding the tax package beyond his prescribed $1.6 trillion.

"I think we can accelerate tax relief -- we should accelerate tax relief -- and keep the size of the tax relief package at the same level," he said. "I think we ought to work to keep it within the $1.6 trillion. I've sent that message."*

4 percent government growth

Following the president, the House budget resolution would hold spending for most federal programs to $661 billion in fiscal 2002, an average increase of 4 percent -- well below the 6 percent to 8 percent average growth of the past several years.

Of that, $324.4 billion is for defense, a 4.5 percent increase, an amount likely to rise after the Bush administration conducts a review of the Pentagon's needs.

Bush, speaking to the Portland crowd Friday, said there was "a lot of hollering" in Washington about that figure, "But that's greater than the rate of inflation."

"That's a big, healthy increases when you're talking in terms of billions," he said.

Unlike the budget blueprint Bush sent to Congress in February, the House plan does not anticipate revenue from federal oil leases in Alaska's Arctic National Wildlife Reserve, which Bush wants to open to oil development over the protests of environmentalists.

Marriage penalty

The House is also expected to vote next week on a bill that encompasses the second phase of Bush's wide-ranging tax-relief plan.

The bill includes provisions reducing the effect of the "marriage penalty" tax, and sets in place a system that would double the per-child tax credit to $1,000 by 2006.

The full Ways and Means Committee, where tax legislation originates, passed the bill on a 23-16 vote along party lines after some four hours of debate Thursday.

To fix the "penalty," under which married couples pay more than they would by filing as singles, House Republicans would go further than the plan offered by Bush on the campaign trail. Their version is almost identical to the Republican bill passed by the House last year and vetoed by President Bill Clinton.

It would make the standard deduction for married couples equal to twice that of single people, and it would adjust income tax brackets to help married couples who itemize their deductions.

It also would benefit couples who now receive a "marriage bonus" -- those who pay less as a couple than they would have as singles.

Democrats argue marriage penalty relief should be more targeted, helping only those who pay more than they would as singles. But 15 Democrats already have signed on as co-sponsors.

The child tax credit component of the new bill is similar to Bush's proposal. The credit would be doubled to $1,000, but House Republicans would phase in the increase more quickly than the president's plan, and the change would be applied retroactively to January of this year. Under the Republican bill the child tax credit would be $600 for the tax year 2001.

CNN's Major Garrett, Ian Christopher McCaleb and Kelly Wallace contributed to this report.

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4:30pm ET, 4/16

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