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Bush administration presses efforts on tax cut

President Bush  

WASHINGTON (CNN) -- President Bush continues his lobbying for tax relief Tuesday with a speech in the Washington suburbs, as administration officials visit Congress to press his case there.

The extravaganza takes the new chief executive just outside of Washington, to northern Virginia, where he will appear at a small business Tuesday afternoon to promote his $1.6 trillion, 10-year tax-cut plan.

Bush will make an early afternoon appearance at the Tree Top Toys and Books store in the Washington suburb of McLean, Virginia, and will talk up provisions of the plan aimed at helping families and small business owners.

CNN's Eileen O'Connor talks with three different families about about a proposed tax cut

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Vice President Dick Cheney, meanwhile, will head to Capitol Hill to meet with the House Republican leaders who will have to shepherd a tax-cut bill through Congress, and with a core group of conservative House Democrats whose support for the bill will be crucial.

The White House believes Americans are overdue for a tax break and that the president's plan will help avert a recession. Democrats favor a much more limited tax cut, primarily aimed at lower- and middle-class families.

"Most of us agree there's going to be a tax cut. The question is how much, how soon and who gets it," Rep. Jim McDermott, D-Washington, told CNN. McDermott is a member of the House Ways and Means Committee, where tax legislation is drafted and debated before it advances to the floor.

The legislation for Bush's plan will be written by the panel's Republican majority, once the president submits his blueprint to the Congress, expected Thursday.

McDermott said he and other Democrats object to the president's plan because they believe it gives too much money to the wealthiest Americans.

"Right now, what I see on paper says that 36 percent of this tax cut goes to the top 1 percent. That's not fair," McDermott said.

It's all about families, Bush says

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.

Bush launched a week of lobbying for his 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.

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, Bush said, tax relief now appears to be 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."

Bush wants quick results

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 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.

The Bush tax train will make further stops as the week continues.

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 say surplus may not hold

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 by 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."

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

Bush launches blitz for huge tax cut
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Bush describes 'cordial' visit with Democrats
February 4, 2001
Bush's to-do list: Set tone for the next four years
January 19, 2001

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4:30pm ET, 4/16

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