Tax-cut fever.

By Salon Staff

Published September 10, 2001 10:40AM (EDT)

Daily line

"Right now the president is saying ... we have a good tax cut in place. It's working in the economy. He is willing to be patient on that. He cautions me to be patient on that and I appreciate him on that."
--House Majority Leader Dick Armey, R-Texas

Bush buzz

The president would like for the nation to focus on his plan to reform the education system. But the sour economy is dominating the political landscape, and the White House and Congress are scrambling to find the magic formula to fix it.

After crummy employment figures pushed Bush to stage an impromptu news conference on Friday, mumbles about goosing the economy with additional tax cuts grew to shouts. Though the president remains noncommittal, congressional Republicans are calling more urgently for a cut in the capital gains tax, something that several GOP members have wanted ever since Bush won passage for the $1.35 trillion tax cut in the spring.

But Democrats historically have slammed capital gains cuts as gifts to the wealthy. And with budget pressures threatening the Social Security "lockbox," the Dems won't hesitate to label a capital gains cut as squandering retirement funds for seniors on benefits for the rich. Perhaps in an effort to duck that charge, some Republicans and Democrats on Capitol Hill are calling for a payroll tax cut which would more directly affect working and middle class Americans.

While Bush and Congress struggle to keep their promises not to dip into the Social Security surplus, some pundits have joined the overwhelming number of economists who have argued that the lockbox battle is an unnecessary and artificial political crisis, and that deficit spending is just what a country at the brink of a recession needs. Others argue that the fiscal projections the president counted on to support his tax cut were, like the lockbox, convenient political fictions that have outlasted their usefulness, and that the White House needs to consider revising that plan.

The problem for Bush is that he swore by both the sunny tax cut numbers and the sanctity of the Social Security surplus, and now he's caught between them. On the Social Security surplus, Bush desperately wants to avoid repeating the "read my lips" flip-flop that killed his father's political career. So he's caught in a waiting game, hoping that the tax rebate checks eventually boost the economy enough to stop the current slide.

And don't miss Supreme Court Justice David Souter's lament that he could have revived the Florida recount -- and Al Gore's presidential hopes -- with one more day of deliberation. Newsweek reports that Souter felt that he could have pulled fellow Justice Anthony Kennedy into the pro-recount camp, but he ran out of time.

Monday's schedule: The president visits a Florida school to highlight his education program.

-- Alicia Montgomery

This day in Bush history

Sept. 10, 1992: The Boston Globe reports on President Bush's efforts to avoid the blame for going back on his "no new taxes" campaign pledge of 1988. In remarks at a Pennsylvania campaign stop, Bush acknowledged that the economy was "lousy," and said congressional Democrats were at fault for tax hikes. "I went along with one Democratic tax increase," he said. "I'm not going to do it again - ever."

Burning Bush

Links to the Web's best sites for hardcore Bush watchers.

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Bushed! contributors: Eric Boehlert, Gary Kamiya, Kerry Lauerman, Alicia Montgomery, Scott Rosenberg, Jake Tapper, Joan Walsh, Anthony York

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