Bush Chooses Laxalt for Deficit Panel

President-elect George Bush, vowing anew not to raise taxes, predicted today that interest rates will decline once he is able to convince world markets that his Administration is serious about shrinking the budget deficit.

“I intend to hold the line on taxes,” Bush said. “There are a lot of people around saying I can’t do that.”

Bush also selected former Nevada Sen. Paul Laxalt, a Republican, and former Ohio Rep. Thomas L. Ashley, a Democrat, as his representatives on the 14-member National Economic Commission, Bush transition sources said. The panel is trying to devise a bipartisan strategy for cutting the federal deficit.

Commission Supported

Tempering skepticism that he voiced earlier, Bush said, “Some have suggested I am something less than enthralled with the National Economic Commission. That’s not right.”

Bush, who takes office on Jan. 20, made his comments in a meeting with about 30 business leaders who pledged their support for a program of reducing the deficit by cutting spending rather than raising taxes.

Reporters were allowed to attend only the start of the meeting and there was no opportunity to ask Bush questions.

Calling the deficit a tough problem, Bush said, “I’ll just do my level best to send signals to the international markets that we’re serious, that we’re projecting it downward firmly, and I really believe that once that happens the adverse psychology that is forcing interest rates up beyond where in my view they ought to be will turn around.”

Benefit to Markets Seen

“I think once world markets think that we’re definitively on a track without exception to have the deficit obliterated in whatever number of years it is, that in itself--a bipartisan answer--that in itself will be enormously beneficial to world markets,” he said.