Bush's tax cuts `sounded too good to be true' for Democrats

Democrats were quick to argue that the maths simply do not add up

Democrats were quick to argue that the maths simply do not add up. They warned that President Bush's "fiscally irresponsible" tax cuts would plunge the country into a Reagan-like recession. "If it sounded too good to be true, it probably is," the Democratic leader in the Senate, Mr Tom Daschle, warned.

But there was little doubt that it was the President's night as, in his first address to Congress, he once again rose above expectations to deliver a confident, well-crafted speech that was interrupted 88 times by the roars of his Republican allies. Today he goes back on the stomp, five days of campaigning across the country, to sell his programme. Introducing his budget plans, Mr Bush took up where the election campaign left off in a speech that in style and substance was pure "W". Education, tax cuts, some debt payback, and the promise of pensions reform, were the main themes - a small number of clear objectives, uncluttered by the detail or the numbers that his predecessor would embellish them with.

Government had a role, he said, "active but limited, engaged but not overbearing", and in the next year spending would be allowed to grow only by 4 percent, a cut of 4 per cent on this year's budget. But there would be exceptions, most notably education, where he promised a trebling of spending on basic reading and "character education", teaching children right and wrong. "High standards and accountability for results" were the watchwords.

Here, on classic Democratic ground, Mr Bush's "compassionate conservatism" was at its most inclusive, winning genuine applause from opposition Congressmen. On tax, however, he had to work harder to convince less effectively: he pointed theatrically to a Hispanic, "typical" couple, seated carefully in camera shot on the balcony, who between them paid some $8,000 a year in taxes.

Mr Bush explained that his tax proposals would give them personally back $2,000 a year, enough to help them pay off their personal debt in two years. Great television - expect to see such personalised presentations cross the Atlantic in no time. But what he failed to explain of the same proposal, across-the-board cutting of basic rates, was the "fairness" of plans which will give 1 per cent of taxpayers, those averaging incomes of $900,000 a year, 43 per cent of the cash he is returning. The sound-bite was good - "the people of America have been overcharged and on their behalf I am here asking for a refund" - but polls show the people ain't convinced and Mr Bush knows he has a battle on his hands with this evenly divided Congress.

Mr Bush returned repeatedly to the themes of civility in politics and bipartisanship, heralding his conversion to paying down the national debt by $2 trillion over 10 years. "I listened and I agreed," he told them, insisting that taking any more off the $3.4 trillion debt would be technically impossible. But that figure too neatly leaves just enough for his $1.6 trillion tax cut and $1 trillion contingency fund to be convincing. Even his own troops are uneasy. Defence got special billing too, a $5.7 billion increase in salaries and benefits for the troops, but a warning that further money must await the root and branch review that the Secretary of Defence, Mr Don Rumsfeld, has been charged with. "Our defence vision will drive our defence budget, not the other way round," he told the unhappy generals sitting in the front row.

Mr Bush won most applause from Democrats with three politically important pledges, to back a patients' bill of rights, to guarantee in his review of pensions funding that entitlements of current pensioners or those soon to be pensioners will not fall, and his instruction "today" to the Attorney General, Mr John Ashcroft, to end the practice of "racial profiling" by the police. The latter had been the particular bugbear of the black community which has persistently claimed that stereotyping of youngsters from their community has resulted in harassment. This is a constituency Mr Bush has to reach out to.

Patrick Smyth

Patrick Smyth

Patrick Smyth is former Europe editor of The Irish Times

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