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Bush launches blitz for huge tax cut

President George W. Bush
President Bush announces his 'real and practical' tax plan that will go to Congress this week  

WASHINGTON (CNN) -- President Bush launched a week of lobbying for his 10-year, $1.6 trillion tax cut proposal Monday by appearing briefly at the White House with members of four families he said could experience significant benefit from his planned restructuring of the tax rate system.

Speaking before reporters and surrounded by members of the families, some of whom clutched small children, Bush repeated pleas first presented on the presidential campaign trail: All Americans who pay taxes deserve tax relief, he said, but he will need help from the public as he works to win over skeptical members of a closely divided Congress.

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Bush appeared at almost every stump speech in the waning days of the presidential campaign accompanied by members of local families, chosen by his local campaign organizations, whom he said would experience a better quality of life if granted a tax break.

With rates of consumer debt remaining high and economic conditions ebbing low, Bush said, tax relief now appears a reasonable way to help families stay afloat, and to keep the broader economy from sinking into recession.

"I am here today with these families to talk about economic challenges they face," Bush said. "Their circumstances are very different, but I strongly believe they should be allowed to keep their own money.

"After talking to these families here," he said, "they like the idea."

Two of the fathers who met with and appeared with Bush on Monday said they planned to use the potential extra cash for their families' education expenses.

"I think the government has enough money," said John Gordon, a father of three who works as an information technology director. "The government can just be more efficient in how it manages the money."

Paul Peterson echoed those sentiments, saying he would use the money to pay for the education of his two young daughters, as well as his own. Peterson, who works for the Ukrops grocery store chain and is trying to get a master's degree, described the meeting with the president as "very informal," one that made everyone there "feel very relaxed," he said.

Bush battles consumer debt, higher household costs

"In 1998 the average family credit card debt was more than $4,000," Bush said Monday morning in explaining his tax cut rationale. "At the same time, every American family is facing higher energy costs. Under the plan I'll be sending to Congress later this week, every American who pays income taxes will get tax relief."

Bush said he will ask that Congress make the plan retroactive to January 1, making it possible for taxpayers to see the results quickly.

Lawrence Lindsey, Bush's top economic adviser, said the president wants to speed up the tax cut to give consumers more spending power in the slowing economy.

"What we want to see is ... people get more money in their pockets sooner," Lindsey said Monday. "There's some trouble out there, apparently, with the economy, and we want to see people have larger paychecks so that they can either pay down their debt [or] use it for some spending that they may want to do."

Bush and Vice President Dick Cheney had lunch Monday with Federal Reserve Chairman Alan Greenspan. White House press secretary Ari Fleischer refused Monday afternoon to comment on the substance of their conversation, but tax relief was likely on the agenda.

Greenspan gave Bush's tax-cut proposal a boost in January, telling Congress surplus estimates had grown so large that he believed there was enough money to both pay down the national debt and provide tax relief.

Bush's proposal would cut the lowest income tax rate to 10 percent and the highest to 33 percent. The plan would change the five-rate income tax structure -- currently 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent -- to four rates, 10 percent, 15 percent, 25 percent and 33 percent. Aides say the plan would save a family of four making $40,000 a year about $1,600.

That $1,600 savings, Bush said Monday, could pay the "average mortgage for one month."

It could also "pay tuition at a community college, or pay for gas for two cars for one year, or help the average California family pay their electric bill for one year," he said.

Energy prices have skyrocketed in California in recent months as the state and utility companies have struggled to overcome shortages of electricity.

A weeklong sales job, and the opposition stiffens

On Tuesday, the president is scheduled to visit small businesses in the Washington area to discuss how his plan would help create jobs.

On Wednesday, the president plans to play host at a reunion of the so-called tax-cut families he highlighted throughout the presidential campaign, to explain what his proposal would mean for families around the country.

The outline of the plan will be sent to Congress on Thursday.

Democrats are proposing a smaller tax cut, estimated to be worth between $700 billion and $900 billion -- a range they say the unpredictable federal budget surplus is likely to yield for an effective tax relief package.

Their plan is aimed more at the middle class rather than the across-the-board approach Bush is supporting. Democratic leaders also argue the president's plan is too large, threatens the surplus, and is too generous to the wealthy.

"People are acting like this $5.6 trillion surplus is etched in stone," said Sen. Kent Conrad, D-North Dakota. "It's not. It's etched in quicksand."

Conrad, speaking to reporters Monday, said one-third of the non-Social Security, non-Medicare surplus should go for taxes, one-third for new spending, and one-third for paying down the publicly held debt. That would leave about $900 billion for a tax cut.

House Minority Leader Richard Gephardt, D-Missouri, told CNN that Bush should make some concessions to back up the calls for bipartisanship that have dominated the first days of his administration in advance of moving his tax package to Congress.

"Look, he's got the House, he's got the Senate," Gephardt said. "He can do whatever he wants. I mean, the bulk of the people in the Republican Party would like to have a $2 trillion tax cut. I'm worried it'll be a $3 trillion tax cut."

Bush responded to the Democratic counterproposals Monday, saying he thought his plan was sound.

"The plan that I have submitted is structured the right way. I've heard all the talk about class warfare, and this only benefiting the rich. Our plan eases inequities in the tax code. The bottom end of the economic ladder receives the biggest percentage cuts."

In addition to an across-the-board cut in marginal tax rates over 10 years, Bush's plan would double the child tax credit to $1,000, reduce the tax penalty on married couples, eliminate the so-called "death tax" on inheritances, expand the charitable tax deduction, and make permanent the research and development tax credit, Bush aides said.

Lindsey said larger surpluses projected over the next decade mean Bush could pay for the tax cut and still meet other budget priorities.

"The budget surplus is $5.6 trillion. Two and a half trillion of that is put aside for Social Security and paying down the national debt," Lindsey said. "That leaves $3.1 trillion in surplus. That's after we've taken care of all existing spending. We're only asking that half of that, [$1.6 trillion] out of the $3.1 trillion, be used for tax cuts."

CNN's Jonathan Karl and Ian Christopher McCaleb contributed to this report.

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Bush's to-do list: Set tone for the next four years
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Bush describes 'cordial' visit with Democrats
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