Tags: Bush | Touts | Economy | Pushes | Extend | Tax | Cuts

Bush Touts Economy, Pushes to Extend Tax Cuts

Tuesday, 06 December 2005 12:00 AM

Do not expect serious tax reform in 2006, Bush administration officials said Monday. The president, they said, is likely to postpone a major overhaul until 2007.

Administration officials told The New York Times that the president will focus on persuading Congress to extend the tax cuts passed in 2001 and 2003.

House Republicans have passed a bill extending the relief for two years, but the Senate just passed a bill without an extension.

The postponement and focus on extension are retreats for the president, who campaigned in 2004 on fundamental tax reform and on making the tax cuts permanent.

On the campaign trail, Bush promised to make the income tax fairer, simpler, and more efficient – leading to increased economic growth.

Bush established a bi-partisan panel in January to study the federal tax code and recommend modifications that would promote "long-term economic growth and job creation."

But lawmakers and other observers were disappointed in the commission's unanimous findings. The most heated criticism was reserved for the commission's suggestion to eliminate the mortgage-interest deduction.

Bush has asked the Treasury Department to propose a comprehensive reform after examining the commission's recommendations.

It appears Treasury will have plenty of time to study its proposal.

CNN reported Monday that White House officials were concerned with losing a legislative battle in an election year. "No one want to put something out there that's not going to go anywhere," an anonymous White House official told CNN.

Instead, the president will focus on extending the tax cuts. He touted tax cuts in a speech at the Deere-Hitachi Construction Machinery Corporation plant in Kernersville, N.C. Monday.

Bush confronted critics of the tax cuts with recent economic statistics.

"Some of those people up in Washington said the tax cuts wouldn't work," he reminded the crowd. "In the spring of 2003, one Democrat leader called tax relief a ‘tragedy,' and said it would not create jobs or grow the economy. Another Democratic leader said the tax cuts ‘are ruining our economy and costing us jobs.'"

"But," he continued, "I want to remind people of the facts: Since those words were spoken, our economy has added nearly four and a half million new jobs ... the latest figures show our economy added 215,000 jobs in the month of November alone. Our unemployment rate is down to five percent. That's lower than the average of the 1970s, the 1980s, and 1990s."

Fortunately," he continued, "I didn't listen to the pessimists about the tax cuts; the tax cuts are working."

Since implementation of the tax cuts in the third quarter of 2003, gross domestic product has averaged an increase of 4.1 percent per quarter. That bests the 3.5 percent average from President Clinton's term in office by nearly 14 percent.

At the same time, government revenue has increased faster than anticipated. In June, the Congressional Budget Office announced that corporate income tax receipts were up 47.5 percent and individual income tax receipts were up 20.5 percent in the first eight months of fiscal year 2005.

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Do not expect serious tax reform in 2006, Bush administration officials said Monday.The president, they said, is likely to postpone a major overhaul until 2007. Administration officials told The New York Times that the president will focus on persuading Congress to extend...
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2005-00-06
Tuesday, 06 December 2005 12:00 AM
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