Bush, McCain Snipe Over Tax Cut Plans

John McCain and George W. Bush traded sharp accusations about their tax cut plans Tuesday as the two leading Republican presidential candidates battled for the New Hampshire voters who will soon decide the nation’s first primary.

Texas Gov. Bush, who also picked up his most coveted endorsement to date from former GOP opponent Elizabeth Hanford Dole, charged that Americans will pay significantly more in taxes if rival McCain becomes president.

“A family of four making $50,000 a year would get a $2,000 tax cut under my plan, a $200 tax cut under Sen. McCain’s,” Bush said in this tax-phobic state, where he lags the senator from Arizona in the polls. “He’s called my plan too big. So has Vice President Gore. I believe my plan is not only just right, it’s realistic.”

McCain, riding in his campaign bus barely 25 miles down the road near Salem, N.H., countered that Bush’s proposal for a $483-billion five-year tax cut is unfair because it favors the rich.

“I don’t think the governor’s tax cut is too big--it’s just misplaced,” McCain told reporters. “Sixty percent of the benefits from his tax cuts go to the wealthiest 10% of Americans--and that’s not the kind of tax relief that Americans need.”

McCain questioned Bush’s accusations Tuesday, since he has not released a detailed tax cut plan. He is scheduled to unveil his plan for tax cuts and other federal budget spending next week, and he said Tuesday that his formula for tax relief will be aimed at lower- and middle-income Americans.

He also gave a preview of his budget speech by announcing Tuesday that he would divert 60% of the projected budget surplus to protect Social Security, 10% to Medicare and an unspecified amount to reducing the national debt.

McCain also said he would allow taxpayers to place 20% of their Social Security contributions in a government-designated menu of investments--similar to a 401(k) plan. If the stock market takes a dive, McCain’s plan would guarantee taxpayers a base level of Social Security benefits.

“It is in the country’s interest, not just the retirees, to see the solvency of Social Security based on personal investments,” McCain said. Unless action is taken, Social Security and Medicare are in “deep trouble,” he said.

The latest tension in the Republican contest is a recent development for McCain and Bush, who have been surprisingly cordial on the campaign trail. Bush holds a commanding lead in national surveys of the Republican presidential campaign. But with less than a month remaining until the vote in New Hampshire, McCain holds a narrow lead among the voters here who will cast the nation’s first primary ballots on Feb. 1.

The rising stakes were reflected in the testy exchange about who would benefit most from the competing tax cut plans.

“Gov. Bush wants to spend the entire surplus on tax cuts,” McCain said. “I don’t believe the wealthiest 10% of Americans should get 60% of the tax breaks. I think the lowest 10% should get the breaks.”

Bush aide Ari Fleischer countered that “the lion’s share” of Bush’s tax relief would go to “low-income Americans trying to get into the middle class.

“George Bush believes that everyone deserves a tax cut and that we shouldn’t engage in class warfare,” Fleischer said. “It’s wrong when the Democrats play class warfare--we would hope the Republicans would refrain from class warfare.”

Bush is revving up his once-leisurely campaign, stumping in two states per day most days this week, directly addressing for the first time differences between himself and his most serious competitor and reaching out to women voters by officially accepting Dole’s endorsement.

He made his first stop of the new year in a state that he had been accused of neglecting; all told he will spend 17 days in New Hampshire.

In contrast, Bush will campaign for only as many as 10 days in Iowa before the Jan. 24 caucuses. McCain has chosen not to campaign in Iowa, where Bush holds a comfortable lead in the polls over his closest rival there, millionaire publisher Steve Forbes.

When Dole dropped out of the Republican race in October, she cited the enormous negative impact of money on the political process--particularly Bush’s war chest of more than $60 million, which dwarfed her fund-raising efforts.

On Tuesday, she threw her lot in with the man whose financial prowess squelched her hopes of becoming the first female president of the United States, saying at a news conference that she wants to “really let those know who were supportive of me that I absolutely want them to get behind George Bush.” In endorsing Bush, Dole touted his ability to attract disenfranchised voters, his tax plan and his efforts at educational reform, an issue traditionally held dear by women voters.

Both Bush and Dole batted away questions about a possible vice presidential slot for the former secretary of Transportation and Labor and president of the American Red Cross. First he has to win the nomination, he said, and Elizabeth Dole will help in that effort.

“From the first day I announced my candidacy, I said that I want to run a different kind of campaign, one that attracts new faces and new voices to the conservative cause of the Republican Party,” Bush said.