Campaigning, Bush Touts Tax Cuts

Times Staff Writer

With his lead in the polls gone, President Bush today highlighted his signature domestic achievement, as he came to this swing state to sign legislation extending key provisions of his across-the-board tax cuts.

He predicted that the extensions, like his earlier three tax cuts, "will have good effects throughout the economy," and called for making the tax cuts permanent and long-term tax code changes.

Bush's pivot back to domestic issues came just four days before a town-hall style debate on Friday that is expected to be dominated by such issues as the economy and healthcare reform.

In two appearances in Iowa, the president — perhaps still smarting from the bipartisan negative reviews of his performance in last Thursday's first debate, which focused entirely on foreign affairs — also assailed Sen. John Kerry's positions on Iraq, North Korea and other foreign policy issues.

Bush issued rebuttals that, it seemed, he wished he had delivered during the nationally televised debate.

At one point, Bush all but shouted that Kerry "has no plan" to end the Iraq war; at another, the president self-consciously posed a question to himself — during an "Ask President Bush" event — to declare anew his opposition to a restoration of the military draft.

At still another point, Bush seemed to bristle at the memory of having been accused by Kerry during their debate of adopting a unilateralist foreign policy, particularly on the Iraq war. Bush noted that in his effort to persuade North Korea to abandon its nuclear aspirations — and perhaps its weapons of mass destruction — he has adopted a multilateral approach, bringing in China, South Korea, Japan and Russia into the six-nation talks.

Kerry had called for direct talks between Washington and Pyongyang, an approach that Bush said had failed under the Clinton administration. "It failed once, and it's going to fail again."

Bush brought up his opposition to the draft after answering a question from the parent of a soldier now deployed in Iraq who wanted to know how long U.S. troops might remain there.

After saying that he would bring the troops home immediately after the job was done, the president asked himself whether the nation would continue to maintain an all-voluntary military.

"Absolutely!" he said, eliciting applause from several thousand invited supporters packed into a YMCA gym in nearby Clive.

The tax extension legislation, overwhelmingly approved by both houses of Congress less than two weeks ago, extends several tax-cut provisions that would have expired this year: a $1,000 child tax credit, expansion of the 10% income tax bracket, and relief from the tax code's "marriage penalty."

The legislation extends the per-child tax credit for five years, the 10% tax bracket for six years, and the marriage penalty for four years.

The bill also extended a number of business tax breaks.

Kerry also favors the middle-class tax breaks, but he is proposing to repeal the tax cuts for families earning more than $200,000 and to use the savings to make health care and education more affordable.

Iowa, with its seven electoral votes, is among a half-dozen states that were decided four years ago by less than 10,000 votes, and both Bush and Kerry are making a concerted effort here this year. Statewide polls show Bush with a slim lead over Kerry.

In remarks before signing the tax extension bill, Bush told several hundred Iowans: "Overall, 94 million Americans will have a lower tax bill next year, including 70 million women and 38 million families with children.

"The money they keep will make it easier to save for their retirement, or their children's education, invest in a home or a small business, or pay off credit card debts. "

At a second appearance, in Clive, a suburb of Des Moines, Bush delivered his standard campaign pitch, but with a twist — by taking a swipe at Sen. Hillary Rodham Clinton (D-N.Y.), who led a failed healthcare reform effort in 1993-94 while serving as first lady.

In a line that drew both laughter and boos — seemingly directed at Kerry, and perhaps Clinton — the president denigrated Kerry's healthcare proposals as "a system that's creeping toward Hillary-care."

The Kerry campaign refuted Bush's description. "If the President bothered to read the Kerry health plan, he'd learn that it's premised on helping small businesses pay for their health expenses," said spokesman Phil Singer.

During the "Ask President Bush" event, Bush also lauded Vice President Dick Cheney on the eve of his debate with Sen. John Edwards, the Democratic vice presidential nominee, calling Cheney "a man of great judgment."

In both appearances, the president offered a likely preview of his core message for his second debate, this Friday, as he argued that "a lot of challenges" had set back the economy. He listed them as "a stock market decline, a recession, terrorist attacks, and war."

But the tax cuts, Bush said, helped the economy recover and still are "making a difference."

The tax extensions, he added: would "leave close to $50 billion next year in the hands of the people who earned it. And that money will help keep the economy moving forward, and result in even more new jobs for American workers."

Bush also called on Congress to make the tax cuts permanent. Otherwise, he warned, "the tax relief will expire and federal income taxes will go up for every American who pays them."

He also called for the permanent abolition of the inheritance tax.

With Cheney and Edwards expected to dominate Tuesday's news, the president is planning to take a rare day off from the campaign trail.

On Wednesday, he is scheduled to deliver what White House Press Secretary Scott McClellan called "a significant speech" on the economy and the war on terrorism, which the spokesman called "our nation's two highest priorities." Bush had been scheduled to focus on medical malpractice reform.

McClellan told reporters that the shift had nothing to do with the president's widely panned performance at last Thursday's debate in Coral Gables, Fla., a debate that erased his lead in the national polls.

"At this stage in the campaign, you always have a little flexibility," McClellan said, adding that Bush intends to highlight his "clear substantive differences" with Kerry on the war against terrorism and the economy.

A new CNN/Gallup/USA Today poll showed Bush and Kerry now tied at 49% among likely voters, while the president held a two-point advantage among all registered voters. As recently as late September, Bush led by nine points among registered voters and eight points among likely voters.

Similarly, a new Newsweek poll of registered voters showed that Kerry led by 49% to 46% — compared to a 49% to 43% edge for Bush in its mid-September poll.

The Los Angeles Times Poll of registered voters who watched the debate showed Kerry leading by 49% to 47%. In late September, Bush led by a 49% to 45% among registered voters.

McClellan said the White House was unconcerned — and not surprised — by the tightening in the polls.

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