Politics

Bush Feeling Heat On Economy

By CBSNews.com staff CBSNews.com staff

September 10, 2001 / 12:46 PM EDT / CBS

With gloom about the economy only deepening, President Bush is facing mounting pressure to do something now to stop the slide. Republicans, worried about political repercussions from the struggling economy, are floating a perennial favorite – new tax cuts – starting with chopping the capital gains rate from 20 to 15 percent.

"I think we should have a capital gains tax rate cut. It would have an immediate effect on the economy," said Senate Minority Leader Trent Lott, R-Miss.

Reducing the capital gains tax on investments would open Republicans to charges of helping the rich, reports CBS News Correspondent Stephanie Lambidakis. So Sen. Don Nickles, R-Okla., is also pushing a cut in the social security payroll tax, which is paid by both employers and workers.

"Maybe we should have a temporary reduction in social security taxes…. That's a middle-income tax cut, that's for anybody who makes up to $80,000," said Nickles on CBS News' "Face the Nation."

Democrats, meantime, are pushing the president to rescind parts of his tax cut and resubmit his budget to reflect the disappearing surplus.

Sen. John Kerry, a Massachusetts Democrat, said Sunday that the nation needs a budget that has "numbers in it that are real." He also said there is little Democrats can do without Mr. Bush's support.

"There is nothing that we Democrats can do by ourselves because we have only a one-vote margin in the Senate and he has a veto pen," Kerry said on "Face the Nation." He also said it was clear the Bush budget would mean taking money from the Social Security surplus.

White House officials have said the tightening economy just puts more pressure on Congress to spend prudently. The administration is considering calling for across-the-board budget cuts next year if the economy worsens, Bush advisers said last week.

Democrats blame Mr. Bush's 10-year, $1.35 trillion tax cut for the nation's economic woes and suggest Social Security reserves are in jeopardy.

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Projections by both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office show that the non-Social Security part of the nation's budget surplus essentially has evaporated.

Since Congress returned to work after Labor Day, Democrats and the administration have been fighting over who is responsible for the economic rut.

The nation's unemployment rate grew to 4.9 percent in August as job losses in manufacturing passed 1 million for the yearlong slowdown. The increase in the monthly jobless rate was the biggest in six years.

Senate Majority Leader Tom Daschle said administratin actions are directly responsible for the current downturn and getting the economy back on track is the president's job.

"It's not really our responsibility to offer a way out of the Bush economy," said the South Dakota Democrat. "It's the president that got us to this situation, and I think it's the president that needs to lead us out."

The Democratic strategy, says political columnist E.J. Dionne, is to let the White House take the heat for now.

"I think in the short run, Democrats want to take as much time as they can holding Bush accountable without having to put something on the table themselves," Dionne said.