President Bush Outlines Economic Agenda

By Paula Cruickshank, CCH Washington Staff Writer

President George W. Bush outlined his plans for a second term agenda at the first formal White House news conference held since his re-election on November 2. The president said he would make the establishment of private Social Security retirement savings accounts for younger workers a top priority. Bush also advised reporters that his tax simplification proposals would be revenue neutral and that he planned to preserve certain tax incentives, such as the mortgage and charitable deductions.

"The main thing is that it would be viewed as fair, that it wouldn't be a complicated (system) [and] that loopholes would not be there for special interests," Bush said in broadly defining his planned tax reform efforts. Citing the charitable and mortgage deductions, the president noted, "I always noted how important it was for certain incentives to be built into the tax code."

On Social Security reform, the president was asked about an estimated $2 trillion price tag for transitioning younger workers from the existing system to a partially privatized one. The president acknowledged the difficulty in changing the current system, but maintained that the "cost of doing nothing" would cost significantly more than taking action to establish voluntary private investment accounts for younger workers.

"We must show our leadership by strengthening Social Security for our children and grandchildren. This is more than a problem to be solved; it is an opportunity to help millions of our fellow citizens find security and independence that comes from owning something, from ownership," Bush urged.

Small Business Tax Relief

The president disputed criticism among his opponents that the Bush administration's economic policies favor the wealthy. Bush said that since the beginning of his first term he has promoted an "aggressive, pro-entrepreneur" tax policy that has primarily benefited small businesses. "Seventy percent of the new jobs in America are created by small businesses . . . and 90 percent of small businesses are sole proprietorships or subchapter S corporations," which pay taxes at the individual rate.

"This is an administration that fully understands that the job creators are the entrepreneurs. And so in a new term, we will make sure the tax relief continues to be robust because I understand the engine of growth is through the small business sector," Bush said.

Fiscal Discipline

The president also maintained he will be able to cut the federal deficit in half through a combination of discretionary spending restraints and pro-growth economic policies. "With good economic policy that encourages economic growth, the revenue stream begins to increase. Coupled with fiscal discipline, you'll see the deficit shrinking," Bush said.

The president also urged the incoming 109th Congress to take steps to reform the budget process, ranging from reinstatement of presidential line item veto authority to pay-as-you-go rules. Other budgetary reforms previously submitted to Congress include mandatory spending caps and an automatic continuing resolution to avoid government shutdown when regular appropriations lapse, noted an administration spokesman. The president urged the lame duck Congress returning on November 16 to finish work on the remaining fiscal year 2005 appropriations measures, which include the funding bill for the Department of Treasury and the IRS.

Political Capital

The president said that his re-election entitled him to "political capital. I earned capital in the campaign, political capital, and now I intend to spend it," Bush asserted. The president vowed to spend his political capital on "what I told the people I'd spend it on: Social Security and tax reform, moving this economy forward, education, fighting and winning the war on terror."

Related items:

FICA Tax Threshold, Social Security Benefits Will Moderately Increase

Congress Approves New Tax Cuts Geared Toward Businesses and Individuals

Congress Extends Individual and Business Tax Cuts; Adds New Tax Relief

Congress Moves To Make Some Tax Cuts Permanent

Prepare Now for Next Year's Tax Season

Posted November 9, 2004.