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Bush calls for $550 billion in tax cuts

Victory in Iraq 'certain, but not complete'

Bush on Tuesday in the Rose Garden:
Bush on Tuesday in the Rose Garden: "We need tax relief totaling at least $550 billion to make sure our economy grows."

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U.S. President George W. Bush pressed Congress to approve $550 billion or more in tax cuts he says will spur a sagging economy. CNN's Suzanne Malveaux reports (April 16)
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WASHINGTON (CNN) -- President Bush used the backdrop of tax day Tuesday to press Congress to approve $550 billion or more in tax cuts he says will spur a sagging economy.

The tax cuts he has proposed would create 1.4 million new jobs by the end of 2004, he said Tuesday -- the deadline for Americans to file their federal income tax forms.

"The proposals I announced three months ago were designed to address specific weaknesses slowing down our economy and kept companies from hiring new workers," Bush said. "Those weaknesses remain today."

Bush's original plan for $726 billion in tax cuts -- half of which would have come from the elimination of taxes paid by shareholders on corporate dividends -- has been whittled down in the Republican-controlled Congress. The House voted to approve $550 billion in new cuts, while a Senate proposal would limit the package to $350 billion.

In speaking to small-business owners in the White House Rose Garden, Bush acknowledged for the first time that his full proposal is no longer on the table. But he urged Congress to avoid putting arbitrary limits on the tax bill, which he says would create jobs by boosting investment.

"We need tax relief totaling at least $550 billion to make sure our economy grows," he said.

Most Democrats argue that the cuts would do little for average taxpayers or to revive the economy. And some moderate Republicans in the Senate, like Sen. Olympia Snowe of Maine, have argued that a burgeoning budget deficit and the costs of the war in Iraq make new tax cuts unwise.

"Senator Snowe believes $350 billion reflects what may be the highest number in tax cuts a majority of the Senate will support," her spokesman, Dave Lackey, told CNN.

Lackey said the economy needs a short-term stimulus to grow, but Bush's plan amounts to "financing long-term tax changes with deficits. Those should be paid for."

The president's proposed budget shows a deficit of $304 billion for the 2004 fiscal year, not counting the costs of the war and occupation of Iraq. Bush said victory in Iraq is "certain, but not complete" and "desperate and dangerous elements" remained at large.

The president is trying to avoid the fate of his father, former President George H.W. Bush, who won a war in the Middle East only to be turned out of office in 1992 amid a sluggish economy.

Less than a month after a U.S.-led invasion force moved into Iraq, combat there has decreased dramatically. But the Federal Reserve said Tuesday that the war slowed U.S. economic activity more sharply than many analysts had expected, and unemployment was steady at 5.8 percent in March.

-- CNN White House Correspondent Dana Bash contributed to this report.

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