The Bush Budget Push

Tonight, President Bush will try to sell the American people on his plan for the future when he makes his very first national address before a joint session of Congress. Mr. Bush will try to convince a skeptical public that with billions in projected surpluses, it makes sense to cut taxes and slow the rate of government spending.

Karen Hughes, counselor to the president, spoke to CBS News Early Show Co-Host Jane Clayson about the Bush budget plan.

"Actually the budget will grow next year," Hughes claims. "The way the president will approach this budget is the way any American family would. That is, he identified priorities and funded them. Some of the things -- schools and health care and prescription drugs for… low-income seniors, defense spending -- are priorities for the president. He funded those priorities.

She says Mr. Bush's other main priority is to pay down debt.

"This budget will pay down an unprecedented amount of debt," says Hughes. "It also creates a contingency fund. Obviously, when you increase funding in some areas, like any family, you have priorities different from year to year. This budget, overall, grows at a higher rate than the rate of inflation. It grows at a reasonable four percent and every department of the federal government will have had an increase over the course of the last three years. So we think it is a very reasonable, responsible budget."

Hughes concedes that given those priorities, there has to be offsetting spending cuts. She says the cuts will take the form of one-time expenditures.

"If you buy a sofa one year, you don't pay it again the next year. If you pave the sidewalk in front of your house one year, you don't have to repave it. Those things keep going forward and they're described as cuts when they're one-time expenses that don't need to be refunded," she says. "In some areas, you'll see things that look like cuts that aren't really cuts because the money was just reallocated to… for example, different departments of government."

Many Americans are interested in . Instead of an across the board tax cut it seems many Americans would prefer a smaller tax cut for lower and middle-income Americans. Would the president be opposed to that?

"The president, as he will say tonight, didn't throw darts at a board to create this tax relief plan. What he did was he looked at areas that he thought were unfair in the tax code and he calculated the cost to correct them. So for example, the greatest percentage of the tax cuts go to those at he lowest end of the economic ladder.

"He thinks it is unfair for people with low incomes to pay a tax rate of 15 percent. He lowered it to 10 percent. Also on principle, he thinks if you have tax relief, everyone ought to get tax relief and no one should have to pay more than a third in federal income taxes."

Hughes dismisses the Democrats' argument that Bush's tax plan primarily favors mostly wealthy Americans.

"It favors every American," she says. "Everyone who pays taxes will get a tax cut under President Bush… That is fair."

The tax cut relies heavily on a surplus and the hope that it will continue over the next ten years.

"If the surplus does not materialize it won't materialize for two reasons. One is Congress spent too much and therefore all the money is gone. And the other is you have an economic downturn," says Hughes. "And that is precisely the time when you do not want to raise taxes because it would hurt the economy even further. We think the best trigger is a reasonable, responsible spending level for the federal government, which is why President Bush is imposing increasing it by four percent."

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