Bush demands €500bn tax cuts

Turning his attention to economic matters at home, President George Bush today demanded at least €500bn in tax cuts over 10 years.

It was a retreat from his original proposal of more than €640bn that reflected congressional reluctance to run up bigger deficits in wartime.

Bush said tax cuts are critical to putting more money into Americans’ hands and thus spurring the economy. He spoke on the day when tax returns are due for millions of Americans.

“Economic and job growth occur when consumers buy more goods and services from businesses such as your own,” Bush said on a sunny spring day in the White House Rose Garden.

“And the best and fairest way to make sure Americans can do that is to grant them immediate tax relief so they have more of their own money to spend or save.”

Bush said his tax cuts would put hundreds of dollars a year into the hands of families.

“That money can cover a lot of bills, a lot of purchases they’ve been delaying,” Bush said. “That money will be in circulation, which will be good for our economy.”

The president sought to answer sceptics in Congress and in the public who fear ballooning deficits.

“In two years’ time, this nation has experienced war, a recession, and a national emergency, which has caused our government to run a deficit,” he said. “The best way to reduce the deficit is with more growth in our economy, which means more revenues to our treasury and less spending in Washington DC.”

Bush’s plan has drawn opposition not just from most Democrats but also from some moderate Republicans who cite rising budget deficits and unknown costs from the war in Iraq.

The president is riding high on the success of the military action in Iraq, but he is clearly haunted by the memory of his father’s surge in popularity after winning the first Gulf War only to lose the public’s confidence when the economy stumbled.

Seemingly resolved to avoid the same fate, this president also is taking his tax-cut argument on the road where he also faces a sceptical public.

Six in 10 US citizens say this is not the time for more tax cuts, which they fear would worsen deficits, an Associated Press poll found.