Bush pledges to renew fight for stimulus plan, concedes red ink likely

Monday, January 7th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ President Bush said Monday he will renew his request for an economic stimulus plan and urged Congress to set aside ``partisan bickering'' to pass it.

``We've made good progress in the war in Afghanistan and we have got to make good progress in helping people find work,'' Bush said at the opening of a meeting with his economic advisers and Federal Reserve Chairman Alan Greenspan.

It was a rare, but not unprecedented, public appearance for Greenspan at the White House. The session underscored the political implications of a lagging economy during a heated election year.

``I'm optimistic that 2002 will be a better year than 2001, and we're here to figure out how to make that happen,'' Bush said.

He conceded what his budget experts have said for weeks _ that the federal budget is likely to run up a deficit this year. Democrats blame Bush's 10-year tax cut for erasing budget surpluses. Bush said he told Americans months ago that deficits might result in case of a recession, war or national emergency.

``We're still all three,'' the president said.

Senate Democrats derailed his plans to revive the economy last month, offering their own prescription, which was rejected by the White House. Bush said his upcoming budget blueprint will include a stimulus plan, and aides said it would be the same one rejected by Senate Democrats.

``Americans, like me, are tired of partisan bickering,'' Bush said. ``We ought to come together and unify around some sensible policies and not play politics with tax relief.''

Bush made the remarks shortly after returning from a 12-day holiday trip to Texas.

First lady Laura Bush, who stayed behind in Texas for an extra couple days of rest, plans to travel Wednesday to Topeka, Kan., and Thursday to Houston before returning to the White House.

Washington promised no similar peace and quiet as Democrats and Republicans girded for battle over control of the House and Senate, which is up for grabs in the November midterm election.

Both sides have seized on the economy _ the recession and looming return to budget deficits _ as a defining issue. Officials fanned out to the television talk shows Sunday in a preview of the fight ahead.

Democrats blamed vanishing budget surpluses on Bush and the tax cut he pushed through last year. Republicans said anyone who criticizes a tax cut must want to raise taxes instead.

Sen. John McCain, R-Ariz., spelled out most candidly the dilemma of lawmakers facing the prospect of new budget deficits and re-election at the same time.

Painlessly meeting this year's budget is iffy under the current economy. But taking back or delaying some of Bush's 10-year, $1.35 trillion tax cut is not ``politically salable,'' McCain said on NBC's ``Meet the Press.''

Administration officials defended the tax cut, a centerpiece of Bush's first year in office.

``The way to stimulate this economy is to give this economy tax relief,'' Commerce Secretary Don Evans said on ABC's ``This Week.''

Democrats led by Senate Majority Leader Tom Daschle, along with independent analysts, said the tax cut helps explain why the federal government is now facing a budget deficit after several years of mounting surpluses.

But Daschle, D-S.D., and most other Democrats have stopped short of calling for its repeal. Asked if Daschle's criticism means he'll consider repealing any of the tax cut, spokeswoman Ranit Schmelzer would not describe his position.

``He wants to see the administration's budget _ he wants to see whether they dip into the Social Security surplus, and if so by how much,'' Schmelzer said. ``And then they can discuss options about how to proceed.''

The White House strategy has been to accuse Democrats of wanting to raise taxes _ something Bush said Saturday would happen ``not over my dead body.'' And Bush has begun putting the popular war on terrorism to political use, saying Democrats should unite behind him on the economy the way they have on the war.

Asked about the no-tax-increase vow, Evans said, ``The president is simply telling the American people that he's going to fight ... to make sure that they're able to keep the money that they earn.''

As for Daschle, ``If he wants to raise taxes, then I invite him to raise taxes,'' Evans said.

But Treasury Secretary Paul O'Neill, who has been known to stray from the administration's line, told NBC: ``I have not seen anyone say they want to raise taxes.''