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Bush, Returning From Ranch, Resumes Efforts for Tax Cuts

By David E. Sanger

The New York Times -- Little Rock

Lacking the votes he needs in the Senate for his tax cut plan, President Bush stopped here Monday on his way back to Washington from his ranch in Texas to campaign for the plan and, perhaps, to put direct pressure on a Democratic opponent, Sen. Blanche Lincoln of Arkansas.

Bush never mentioned Lincoln’s name, but he urged his audience --mostly Republican supporters and owners of small businesses in a state that he won narrowly in 2000 -- to contact their congressional delegations on behalf of his plan.

Lincoln, a member of the Senate Finance Committee, which will take up the legislation this week, issued a statement Monday afternoon that left the president little room for hope.

“Arkansans need to know,” she said, “that the president's proposal to eliminate taxes on dividends is simply too expensive and just won’t work for them.”

Bush, in his speech Monday and in a similar one on Friday in Santa Clara, Calif., described his proposals as job generators, especially for small businesses. Monday, he appeared to go slightly further, at one moment describing his proposal as one of a series of tax reductions to come.

Bush said he was “concerned about the deficit,” an issue that has given pause to many in his own party, but he added he was “first and foremost concerned about that person looking for a job.”

Monday night, Sen. Charles E. Grassley of Iowa, chairman of the Finance Committee, told fellow Republicans that he would offer a skeletal tax plan of his own on Tuesday that would include neither a reduction in taxes on stock dividends, a central element of the Bush proposal, or new aid to the states, an important issue to some swing senators.

Other senators said Grassley hoped to buy two days of time to pressure other senators before his panel meets to draft legislation on Thursday.

But so far, senators seem locked into positions, and that means that the president is at least two votes shy of a majority in the Senate.

On Tuesday, the House Ways and Means Committee plans to take up and almost certainly approve a $550 billion 10-year tax cut that follows the president’s prescription with one important exception. Instead of eliminating the tax on dividends as the president proposed, the House bill would reduce the tax on dividends and capital gains, to 15 percent.

In the Senate, Grassley is bound by a budget that limits the total 10-year tax cut to $350 billion. He was under pressure Monday, according to people who were at a meeting of all Republican senators, to include in that package some measure on stock dividends. Sen. Trent Lott of Mississippi said there was overwhelming sentiment among fellow Republicans for the proposal.