Bush Details $60-Billion Tax Cut Plan

President Bush proposed a $60-billion package of tax cuts Friday to help rejuvenate the economy, rejecting Democrats’ appeals to spur a recovery with more spending.

The tax cuts would come on top of $60 billion in emergency spending programs already approved by Congress or proposed by Bush since the Sept. 11 terrorist attacks, bringing the total stimulus package to $120 billion.

“In order to stimulate the economy, Congress doesn’t need to spend any more money; what they need to do is to cut taxes,” the president said.

The president’s tax proposals would come on top of the huge tax cut enacted earlier this year, among whose provisions were the rebate checks of up to $600 that were mailed to taxpayers this summer. That tax package will cost the Treasury an estimated $1.35 trillion over 10 years.

The Bush proposal appeared to meet the prescription suggested by Federal Reserve Chairman Alan Greenspan, who said that any economic stimulus package should be quick, large and temporary.

The urgent need for action was underscored with Friday’s jobless report, which showed a loss of 199,000 jobs in September even before the terrorist attacks. That was the worst job loss in more than a decade. Though the unemployment report was unchanged at 4.9%, that was described as a statistical fluke.

But it remains to be seen whether further tax cuts would spur spending by consumers. The tax rebate checks mailed out in August and September appeared to have little effect on the overall economy because many people didn’t spend the money.

Bush’s new plan is certain to face opposition on Capitol Hill, where Democrats want to devote more resources to emergency spending and have expressed reservations about some of Bush’s specific tax cut priorities.

The dispute over stimulus strategies came as Treasury Secretary Paul O’Neill was preparing to tell his counterparts from other big industrial nations today that they should do more to keep the world economy from sliding into recession.

Bush announced the particulars of his new tax package with little advance warning, standing at the edge of the White House Rose Garden with O’Neill and Vice President Dick Cheney at his side. The plan’s four elements would:

* Accelerate the provisions of the $1.35-trillion tax cut that have not already taken effect.

* Send rebates to low- and moderate-income taxpayers who didn’t receive rebate checks earlier this year because their tax bills were too low or they paid no taxes.

* Allow expanded write-offs for capital expenditures, such as purchases of new equipment, by businesses.

* Eliminate the corporate alternative minimum tax, which is intended to make sure all firms pay some taxes.

“The American people expect us to act, and here’s a way for us to act,” Bush said.

Overall, Bush is calling for a total economic stimulus package of about $120 billion--half tax cuts and half spending increases.

On the spending side, Congress has already approved a $40-billion package of post-attack emergency aid and a $15-billion airline bailout.

In addition, Bush has proposed an extension of unemployment benefits and $3 billion in emergency grants to help laid-off workers.

“We’ve spent money, and that’ll have a stimulative effect of some kind,” he said. “But to make sure that the economy gets the boost it needs, Congress ought to come together quickly and accept the ideas I’ve just laid out.”

Although Bush did not estimate the cost of the tax cuts he proposed, budget experts say the accelerated income tax rate cuts would cost about $25 billion, and the rebates for low-income workers about $16 billion.

That would leave about $19 billion for the business tax breaks. Only the corporate tax changes would have a lasting effect on the tax code.

“We believe that’ll be the best way to make sure that America recovers from the terrorist attack of Sept. 11,” Bush said. “The terrorists attacked us, but they did not diminish our spirit, nor did they undermine the fundamentals of our economy. And we believe if we can act expeditiously, that those fundamentals will kick back in and people will be able to find work again.”

Bush’s comments appeared to be an attempt by the administration to draw a line in the sand between tax cuts and spending initiatives in the next round of stimulus legislation.

By limiting spending to measures already approved by Congress or proposed by him, Bush was rejecting efforts by Democrats to provide more assistance to the unemployed or launch emergency construction projects to rebuild the nation’s infrastructure.

“If this means that we’re not going to help laid-off workers, Democrats are not going to be embracing this plan,” said Kori Bernards, spokeswoman for House Minority Leader Richard A. Gephardt (D-Mo.).

Republicans, however, applauded the president’s effort to reserve most of the next stimulus package for tax cuts.

“Since there has been no shortage of government spending in recent weeks, Congress must now focus on providing a new round of tax relief for American taxpayers,” said House Majority Whip Tom DeLay (R-Texas).

“Generally, people are very happy,” said a Republican congressional staffer who requested anonymity. “We heard our marching orders . . . and we’re getting to work.”

While the White House was pressing Congress to adopt the president’s stimulus priorities, O’Neill was preparing to lobby world financial leaders today to take additional steps to shore up the slumping global economy.

O’Neill told reporters the talks would focus on the need for concerted action to prevent the global economic downturn from deepening and to stop the flow of money to terrorist organizations.

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