Dems: Bush Economic Plan Favors Rich

Even before President Bush details his economic plan, Senate Democrats on Sunday sharpened their criticism, previewing the battle ahead in Congress on how best to promote growth and jobs.

Democrats said they wanted the help the middle class while the president's proposal, to be made public in a speech Tuesday in Chicago, would benefit the wealthy and corporations. The White House says Mr. Bush was assembling a plan to strengthen growth, create jobs and help people who are in need.

"We should do something to take care of people who work for corporations, not help the corporations necessarily," the second-ranking Senate Democrat, Harry Reid of Nevada, said in a broadcast interview

Mr. Bush's plan, which administration officials say could cost $600 billion over 10 years, likely will include an extension of unemployment benefits; an acceleration of tax cuts Congress approved in 2001; a cut in dividend taxes by 50 percent or more; and tax incentives to prompt more spending by businesses.

Continuing the criticism from leading Democrats over the past few days, Reid said many elements of Bush's plan, such as a cut in the dividend tax, would largely ignore the poor and middle class.

And Sen. John Edwards, D-N.C., a 2004 presidential candidate, said in a televised interview that "if this is what he thinks is going to help regular people in times of an economic downturn, it just shows how out of touch he is."

But some expected elements of the plan would win bipartisan support, said Sen. Evan Bayh, D-Ind. He cited assistance for states to offset budget deficits and targeted tax cuts that help the middle class.

Among tax relief accelerations under consideration by Mr. Bush are expanding the child tax credit to $1,000 sooner than now called for and providing relief from the marriage penalty paid by two-earner couples more quickly than in current law.

"You may see some fine-tuning of the president's program to make it more effective, to actually get more bang for the buck," Bayh said on CNN's "Late Edition."

In the president's defense, Sen. Don Nickles of Oklahoma, the outing No. 2 GOP leader, said cutting dividend taxes, helping corporations and stimulating investment could boost 401(k) retirement plans and infuse more money into companies that could then be used to hire more workers.

Nickles said he hoped the Senate would address the issue of extending unemployment benefits as early as Tuesday, when they return to session.

Sen. Chuck Hagel, R-Neb., said the Bush plan was well-balanced and smartly focused on encouraging investment.

"Our productivity comes from capital investment," Hagel said. "That is the smart way, the only way to grow the economy, and the long-term obligation that this government has. The president is on the right track."

Reid suggested that a temporary freeze on the collection of payroll taxes may help more people because "the average American pays far more in payroll than income tax."

Republican Sen. John McCain of Arizona agreed. "I think probably it's a good idea to have some cuts in dividends and taxes on dividends but I think it's important to recognize that the people that kept our economy going are middle-income Americans," he said on CBS' "Face the Nation."

House Democrats and their new leader, Rep. Nancy Pelosi of California, planned to announce their own economic stimulus package on Monday. Pelosi said the Democrats' plan would focus on job creation and would not cost as much as Mr. Bush's proposals to expand tax breaks.