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Bush administration reconsidering additional tax cuts

By John King, CNN Senior White House Correspondent

WASHINGTON (CNN) -- Bush administration officials concede that the shrinking federal budget surplus will make it more difficult to sell Congress on additional tax cuts contained in several of the president's pending legislative initiatives.

Most of the suggested cuts are in two of President Bush's most prized, but unresolved legislative proposals: his national energy plan and his so-called faith-based initiative.

Neither have come before Congress.

Administration officials say they will review matters on a case-by-case basis as Congress considers these and other bills in the fall, but acknowledge there is a tight spending environment, and leading members of Congress have ideas of their own about proposed tax cuts and tax incentives.

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Democrats who were critical of the $1.35 trillion Bush tax cut are promising to put pressure on the administration to spell out either spending cuts or tax increases it would be willing to accept to offtset the effects of additional tax cuts.

Administration officials say Bush is not open to any tax increases, although the president's budget does include some adjustments to the tax code, or so-called "user fees" that would raise additional revenues for the government.

Among the administration's pending tax cut ideas are incentives to:

* Allow those who do not itemize on their federal tax returns to still claim deductions for charitable giving,

* Allow IRA withdrawals on a tax-free basis for charitable giving, and,

* Encourage purchases of more fuel-efficient cars such as those using "hybrid" power sources.

• The Internal Revenue Service
• The White House

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