Bush Aides Will Testify on Tax-Cut Plans : Economy: Democrats are likely to push a reduction for middle class and a hike for wealthy. The White House wants to pare capital gains levies.

The House Ways and Means Committee has summoned top Bush Administration officials to testify on proposed tax cuts to stimulate the faltering economy at politically charged hearings that open today.

With President Bush moving cautiously on tax legislation, Democrats on the panel are expected to push their own plans for middle-income tax cuts offset by tax increases for the wealthy--ideas that they hope to exploit in the coming political campaign as part of a “fairness” issue.

In return, Administration witnesses are expected to emphasize the need for a “growth” package centered on a cut in capital gains taxes as a better recession remedy while defending the President’s decision to delay unveiling his own economic plan until his State of the Union speech Jan. 29.

As a result, partisan cross-fire over “fairness” and “growth” is expected to dominate the two-day hearings called to lay the groundwork for passage of a House tax-cut bill by mid-March.

Republicans concede that Democrats have the advantage in promoting tax equity but charge that the party that controls Congress has neglected proposals to increase investment and savings that the GOP has championed.

For their part, Democrats contend that Republican tax-cut plans invariably provide the greatest benefits to the wealthiest taxpayers while shortchanging middle-income Americans.

“The middle-income tax cut really deals with the issue of fairness and not growth incentives,” said Rep. Robert T. Matsui (D-Sacramento), a member of the Ways and Means panel. “But we have no idea of what the President wants to do.”

As envisioned now by the Democratic leadership, no tax legislation will be acted upon until after Bush unveils his own plan in January. Allowing for House and Senate approval, plus negotiation of a Senate-House compromise, it may take until May or June before legislation is sent to Bush.

Experts said the painful truth is that nothing Bush and Congress can do is likely to be massive enough--or timely enough--to jolt the economy out of its current daze.

But the demands of politics and the approaching presidential election campaign require a display of action. At the White House, one official even held out the possibility that Bush may be willing to support a tax-cut plan that would raise the fast-mounting federal budget deficit if economic statistics show a need for emergency assistance.

“If things are bad, we may just have no other choice,” an Administration source said.

But no surprises are expected when Treasury Secretary Nicholas F. Brady, Budget Director Richard G. Darman and Michael J. Boskin, chairman of the Council of Economic Advisers, appear on Capitol Hill today.

Key Democrats said the Administration’s economic team will be cross-examined extensively by the committee on their outlook for the economy and on an item-by-item appraisal of a big tax-cut package, put forward by House Republicans, that President Bush endorsed just before Congress recessed for the holidays.

“If we’re not going to deliver on growth, we have a problem,” Rep. Newt Gingrich (R-Ga.), House minority whip and a champion of immediate government economic action, acknowledged in a recent interview. “If the economy continues to flounder, we’re in real trouble.”

Reflecting similar fears, a senior White House official said the Administration’s main concern is that congressional Democrats will seek to exploit the hearings and “grab the fairness issue and use it to beat us up politically.”