No Hope for Bush Tax Plan, Foley Believes

President Bush’s bid to revive his plan for a cut in capital gains taxes has no chance of success in Congress, House Speaker Thomas S. Foley said today.

In his State of the Union address Tuesday night, Bush said he would renew proposals to use tax breaks to encourage Americans to invest and save more of their earnings.

Bush said his fiscal 1992 budget, due out Monday, will propose tax-free family savings accounts, penalty-free withdrawals from individual retirement accounts for first-time home buyers and cuts in the long-term capital gains tax on the sale of real estate, securities and other assets.

But Foley said today there is no realistic possibility that Congress will go along.

“I don’t think tax reduction is a good idea at this very moment,” the Washington Democrat said on NBC’s “Today” program.

Would the Bush proposal be “dead on arrival?” Foley was asked.

“I think so,” he replied.

Bush prodded the Federal Reserve to bring the recession to a speedy end with lower interest rates and encouraged banks to keep lending despite the downturn.

He also linked federal education, highway and energy programs to his economic growth strategy. And he counseled perseverance in the Uruguay Round of world trade talks, which nearly collapsed in December when Europeans and the Japanese balked at cutting farm subsidies.

Bush offered no detail of his “banking reform plan to bring America’s financial system into the 21st Century,” but the Treasury Department is expected to present a comprehensive proposal next week.