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Bush: A tax raise? 'Not over my dead body'

President Bush speaks before a town hall meeting in Ontario, California, on Saturday
President Bush speaks before a town hall meeting in Ontario, California, on Saturday  

By Manuel Perez-Rivas
CNN Washington Bureau

ONTARIO, California (CNN) -- A defiant President Bush defended his tax cut on Saturday against claims that it has contributed to the nation's economic slump, vowing "not over my dead body will they raise your taxes."

Bush defended his tax cut before a town hall meeting in Ontario, California, speaking a day after Senate Majority Leader Tom Daschle said the 10-year tax cut passed last year probably made the recession worse.

Critics will seek to stop future phases of the cut from taking effect, the president predicted.

"There's going to be people that say we can't have the tax cut go through anymore. That's a tax raise," he said. "And I challenge their economics when they say raising taxes will help the country recover. Not over my dead body will they raise your taxes."

U.S. President Bush strongly supports further tax cuts (January 5)

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The pledge brought to mind his father's now famous "Read my lips: no new taxes" campaign promise that the elder Bush later rescinded.

Though the president is not yet running a campaign for reelection, Washington is girding for a crucial midterm election later this year that could tip the balance of power in either the Democrat-controlled Senate or the GOP-led House of Representatives. Losing the House could deeply hurt Bush's chances of pursuing his agenda over the remainder of his term.

With Bush enjoying a surge in popularity for his handling of the war on terrorism in the aftermath of the September 11 terrorist attacks, Democrats have seized on the economic recession as an issue that could resonate with voters in November. Indeed, recent polls show more voters are concerned about the economy than about terrorism.

Daschle: Tax cut hurt recession

Bush's stand against taxes comes a day after Daschle, a South Dakota Democrat who is a potential presidential candidate in 2004, presented his own proposal for improving the nation's economic health. Daschle also criticized Bush's $1.35 trillion tax cut last year as something that "probably made the recession worse."

On Saturday, Bush responded.

"Somebody told me the funniest thing. They said, 'There's some in Washington saying that the tax cut caused the recession,'" he said, eliciting laughter from the crowd of business leaders, workers and other supporters in the audience. "I don't know what economic textbook they're reading."

Tax cuts, he countered, have the opposite effect. "If you think the economy is going to slow down, the best way to recover is to let people have their own money in their pockets to spend, not the government," he said.

Bush also blamed the September 11 attacks for some of the country's current fiscal woes.

"There is no question that the attacks of September the 11th hurt our economy," he said. "I mean, there is no question about it. ...The attacks affected the confidence of the American people."

Daschle issued a statement after Bush's remarks, saying he did not call for a tax increase.

"No amout of hot rhetoric will get the economy back on track," Daschle said. "Let me be clear, I proposed short-term tax cuts to create jobs and generate investment and long-term fiscal discipline, not tax increases."

The debate between Democrats and Republicans in Washington began building last summer, when lowered fiscal projections showed government spending would begin eating into the Social Security surplus. The terrorist attacks temporarily silenced their differences.

Disagreements surfaced again in December as both sides failed to reach an agreement on an legislative package to help the economy recover from the recession. Lawmakers went home for the winter recess, which ends January 23, without passing a stimulus package.

Two versions of the legislation, which had Bush's support, were passed in the GOP-led House, but Democrats in the Senate, led by Daschle, refused to back the bill. They said it would give too many tax breaks to big businesses while not doing enough for unemployed workers.

Arguments on the radio

Both sides continued feuding over the stalled economic stimulus bill -- with Bush now calling it an "economic security" package -- in their weekly Saturday radio addresses.

"I made my proposals to create new jobs and help dislocated workers on October 4, three months and 943,000 lost jobs ago," Bush said on the radio. "The House of Representatives accepted my proposals. But the Senate Democratic leadership would not even schedule a vote."

Speaking for the Democrats, U.S. Sen. Byron Dorgan of North Dakota said the Republican economic proposal wouldn't work.

The GOP is "proposing more tax cuts, mostly for the affluent and big corporations," Dorgan said. "They will end up paying for their tax cut with money from the Social Security trust funds and by increasing federal debt.

"We have a better plan," he said, citing the plan Daschle outlined Friday.

Democrats support "the right kind of tax cuts" said Daschle. He said last year's Republican tax cut, which he projected would cost $1.7 trillion over 10 years once interest costs are factored in -- was irresponsible and led to "the most dramatic fiscal deterioration in our nation's history."

Daschle proposed two business tax cuts aimed at creating jobs and spurring investment. He also insisted that an economic stimulus plan had to provide more assistance for unemployed workers lacking health-care coverage -- an issue that had Democrats and Republicans at odds in December.

In his radio address, Bush criticized the Senate for not even taking up the stimulus bill that passed in the House.

"Some in the Senate seem to think we can afford to do nothing, that the economy will get better on its own, sooner or later," Bush said. "I say that if your job is in danger or you have a loved one out of work, you want that recovery sooner, not later."

Bush's trip Saturday to the West Coast, which included stops in California and Oregon, was described by aides as the beginning of an offensive to pressure Democrats into supporting economic stimulus legislation. On Monday, he plans to meet with his economic advisers to address recovery proposals.

"There are troubling signs that the old way is beginning to creep into the people's minds in Washington," Bush said of the increasing partisan squabbling over the economy.

"After all, it's an election year," he said. "It's tempting to revert back to the old ways."




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