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Bush, Kerry Trade Domestic Barbs

While controversy swirls over President Bush's wartime service in the Texas Air National Guard, Mr. Bush and Democratic rival John Kerry traded accusations on key domestic issues in two battleground states.

In Pennsylvania, Mr. Bush argued that his economic plans will expand opportunities for small businesses and regular people, while Kerry's proposals will only expand the government.

In Iowa, Kerry charged that the Bush administration has offered nothing in four years to counter the soaring cost of health care and has lost touch with working families.

Meanwhile, a CBS News poll shows Mr. Bush picked up a four-point bounce from the Republican convention and now leads Kerry by seven points.

Mr. Bush's gains reflect a major improvement in his approval ratings on handling terrorism (already the area where he scored best), and significant negative changes in perceptions of the Democratic nominee.

Appearing at a Christmas figurine factory in Colmar, Pa., Mr. Bush offered hopeful words about the economy, contending his administration is making progress for American workers and portraying Kerry as a tax-and-spend Democrat.

"America will reject the hidden Kerry tax plan," Mr. Bush said during a speech at Byers' Choice, a company Robert and Joyce Byers started in their kitchen in the late 1970s. "Raising taxes will be bad for our economy. Raising taxes will be bad for the small business sector of America."

Kerry has proposed rolling back tax cuts only for those earning more than $200,000 a year, or about 2 percent of taxpayers, and has rejected claims by Mr. Bush that middle-class taxpayers would see a rise in taxes under Kerry's economic plan.

In Colmar, Mr. Bush reiterated economic themes he laid out in his acceptance speech at the Republican convention, saying that he believes the appropriate role of the federal government is to help people improve their own lives by creating more opportunities for ownership.

Kerry has argued that Mr. Bush's policies benefit only the wealthy and squeeze the middle class. The Democrat also says Mr. Bush's program has not produced a significant number of jobs and has burdened the federal deficit.

The president's opening remarks in Colmar were disturbed by the shouts of a handful of hecklers, all of whom were forcibly removed from the event, one pulled out by her hair. Two of the demonstrators held signs that appeared to call for more money for AIDS.

Kerry appeared at a medical center in Des Moines, Iowa, where he argued that the president has failed to hold down rising health care costs during his time in office, citing a new report that showed a double-digit increase in insurance premiums for the fourth year in a row.

"Health care just has this unlimited ability to keep going up every year, and people can't keep up with it. President Bush for four years has had an opportunity to try to deal with this, and he has no plan at all," Kerry said.

"In fact, he's been busy losing people's coverage."

Kerry also pointed to a record increase in Medicare premiums.

The nonpartisan Kaiser Family Foundation reported that employer-sponsored family health care premiums grew 11.2 percent for the year ending last spring. That was the fourth straight year of double-digit increases, though it was down from the 13.9 percent of the previous year.

At the same time, the percentage of workers receiving health care from their employer fell from 65 percent in 2001 to 61 percent in 2004.

Kerry says he wants to help more businesses offer health care by requiring the federal government pick up 75 percent of catastrophic health care costs, a plan the campaign estimates will lower premiums 10 percent on average.

He would give small businesses a tax credit to help employers bear the rising cost of health insurance.

The Massachusetts senator also favors letting Americans buy lower cost drugs from Canada, a policy the Bush administration has been studying while expressing concern about a safe drug supply.

Kerry also responded to a statement Vice President Dick Cheney made in Des Moines earlier this week that if voters made the "wrong choice" in November it could lead to another major attack by terrorists.

"George Bush refused to contradict that comment or walk away from it yesterday," Kerry said In an interview with The Associated Press.

"George Bush and Dick Cheney are engaging in shameful and irresponsible and outrageous behavior in trying to play the politics of fear and exploit the war on terror," he said. "I think the American people are fed up and tired about that kind of campaigning."

In the other big campaign story, a CBS News interview and newly released documents suggest President Bush received preferential treatment in gaining entry to the National Guard during the Vietnam War and did not meet standards during his service period.

Former Texas House Speaker and Lt. Gov. Ben Barnes told CBS News Anchor Dan Rather that in 1968, at the request of a Houston businessman friendly with the Bush family, he helped arrange to get George W. Bush into the Texas National Guard.

Mr. Bush has denied he received special treatment.

The White House ascribed Barnes' remarks to political motives. Barnes is an adviser to John Kerry.