Bush Sounds a Bearish Note in Chicago

President Bush took a page out of his father’s political playbook Tuesday, using the floor of one of the nation’s major trading hubs to warn that the economy is sputtering and needs the kick that he said a tax cut would provide.

While he urged the traders to pressure Congress to support his proposal to reduce taxes by $1.6 trillion over 10 years, in Washington the House Republican leader was pressing for a larger cut.

House Majority Leader Dick Armey of Texas said that the apparent weakness in the economy justified cutting taxes even more.

“There is no reason for us to be boxed in by that number,” Armey said. “I will continue to prod everybody. . . . We need to look at what we can do to move the economy along at a better pace.”

In what has become typical of his on-the-road campaign for the tax cut, Bush spent all of 13 minutes at the microphone, delivering a melange of political kidding--aimed at Mayor Richard M. Daley, in this case--presidential applause for the entrepreneurial spirit and red-flag warnings about the economy.

Speaking in the high-tech pit of the Chicago Mercantile Exchange where cattle futures are traded, Bush said: “We’re facing a problem. And the problem is our economy’s slowing down. You all know that as well as anybody does. This kind of great boom is beginning to sputter a little bit.

“I think it is particularly appropriate to not only cut taxes to make sure there’s fiscal discipline in Washington, but it’s necessary to make sure this economy doesn’t continue to sputter. When you give people some of their own money back, or don’t take it in the first place, they will have money in their pockets to spend.”

The size and reach of the tax cut have begun to grip Republicans. As Armey argued to increase it, saying he would expand individual retirement accounts and provide new tax breaks for investments in software to boost the high-tech industry, the chairman of the Senate Finance Committee, Charles E. Grassley (R-Iowa), said a bigger tax cut would not fly in the Senate.

Given the Senate’s 50-50 split, Grassley said efforts to increase the tax cut would simply split the GOP and drain support from Republican moderates.

While Bush spoke to a rainbow of traders and clerks in the traditional jackets of rust yellow, scarlet and green--as well as one in zebra stripes--he competed with the raucous shouts from an adjacent pit where futures in stock market indexes continued being traded. The mercantile’s four exchanges do not close simultaneously. The cattle pit had shut down before Bush arrived.

Former President Bush visited the mercantile in December 1991, using it as a political stage during the 1992 primary election campaign while the nation was struggling to emerge from recession. During that visit, he acknowledged that the U.S. economy, under his watch, needed a “kick” to “get it started up again.”

The visit to Chicago by the 43rd president, his first to the city since taking office, and that of the 41st president differed in their dining: The elder Bush had lunch at the Billy Goat Tavern, a working-class hangout made famous in a skit on “Saturday Night Live.”

The younger Bush ate in a private dining room at the mercantile with Daley--two political sons from opposite sides of the political spectrum. Daley’s father, Richard, also a mayor of Chicago, delivered Illinois for John F. Kennedy’s 1960 presidential campaign and his brother, Bill, ran Al Gore’s presidential campaign in 2000.

“I got a Chicago political lesson for lunch,” Bush said.

Illinois was the sixth state Bush has visited in a week in his campaign to win approval of the tax cut.

The stops have largely been to states where Democratic senators can anticipate close races in 2002 when they seek reelection.

But that may be a reach in Illinois--a state that Bush lost by a margin of 55% to 43% in the presidential election, where the Republican Party is struggling to maintain the governorship, and where Sen. Richard Durbin, a Democrat, won election by a handy margin of 57% to 40% four years ago.

Still, Bush worked the local political angle. On his trip here, he gave a lift aboard Air Force One to Sen. Peter Fitzgerald, an Illinois Republican. For the flight back, he was being joined by House Speaker J. Dennis Hastert, whose district is nearby, and Rep. William O. Lipinski, an Illinois Democrat.

Bush had a broader audience in mind in Chicago. It was what his spokesman Ari Fleischer called “this growing investor class” made up of middle-income Americans investing in the financial markets.

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Gerstenzang reported from Chicago and Hook from Washington.