Bush plugs tax cuts in Ohio, pressuring reluctant senator
GOP's Voinovich cites growing deficits
CANTON, Ohio (CNN) -- President Bush pushed for his new package of tax cuts Wednesday in Ohio, home to a moderate Republican senator who wants to trim the bill to rein in growing budget deficits.
Bush first proposed more than $700 billion in new tax cuts, including the elimination of the tax on dividends. The administration says its plan would create 1.4 million jobs by the end of 2004, when Bush faces re-election.
"When you have more money to save and invest, it's good for your future. It's good for this economy," Bush said.
But the House of Representatives trimmed the package to $550 billion. And the Senate agreed to only $350 billion after some senators, including Ohio's George Voinovich, objected to bigger tax cuts when the administration is projecting $300 billion in deficit spending.
"Some in Congress say the plan is too big. It seems like to me they might have some explaining to do," Bush said. "If they believe tax relief creates jobs, why are they for a little bitty tax relief package?"
The presidential visit to Ohio was meant not only to rally public support for the tax cut but also to put pressure on Voinovich, a popular Republican who was Ohio's governor and mayor of Cleveland before going to Washington. Voinovich did not attend the Canton speech, but he was among those who greeted Bush upon his arrival at Wright Patterson Air Force Base in Dayton, Ohio.
Mixed economic news
Bush's speech at a ball-bearing plant in Canton followed the release of mixed economic news Thursday. New claims for jobless benefits last week hit the highest level in a year, but factory orders rose an unexpected 2 percent in March. And Bush said inflation and interest rates were low, fuel prices are dropping and productivity is up.
"We know this economy can grow faster, and as it grows faster, it will create more jobs," he said.
Bush also spoke at Ohio's Lima Army Tank Plant, which builds the M1A2 Abrams, the main battle tank used by the U.S. Army and Marines.
"When our soldiers and Marines needed you most and the pressure was on, you came through -- and America is grateful," Bush said.
Voinovich supported Bush's $1.3 trillion tax cut in 2001. But Sen. Lincoln Chafee, R-Rhode Island, said pressuring Voinovich this time could backfire.
"He's a revered politician in that state and very responsible," Chafee told CNN.
Chafee said the 2001 tax cuts have so far failed to pull the economy out of its doldrums, and Congress now has to pay more for homeland security and military expenditures in Afghanistan and Iraq.
"We don't like taxes," Chafee said. "But at the same time, we have to make sure we're doing responsible thing and not getting into tremendous deficits."
Bush's $2.2 trillion proposed budget for 2004 includes a record deficit of $304 billion. He blamed the deficit on the wars in Afghanistan and Iraq, the 2001 recession and the terrorist attacks on New York and the Washington area.
He said tax cuts, combined with spending restraint, would boost the economy. The White House has said Bush still wants his original amount, and he has campaigned for a package of "at least" $550 billion.
Other Republicans have lashed out at the moderates. A conservative advocacy group, the Club for Growth, produced television ads comparing Sen. Olympia Snowe and Voinovich's position to French opposition to the war in Iraq.
Democrats had harsh words for the Bush plan.
"If he really wanted to roll up his sleeves and get to work creating jobs, he would not keep promoting his misguided economic policy that provides tax cuts only for those who need it least, explodes the deficit and does not create jobs," House Minority Leader Nancy Pelosi, D-California, said in a statement released Thursday.