WASHINGTON - President Bush on Tuesday demanded at least $550 billion in tax cuts over 10 years, a retreat from his original proposal of more than $700 billion that reflected congressional reluctance to run up bigger deficits in wartime.
On the tax-filing deadline, Bush told an audience of supportive small-business owners that tax cuts are critical to putting more money into Americans' hands and thus spurring the economy.
"All of you know that economic and job growth will come when consumers buy more goods and services from businesses such as your own," Bush said, squinting in the bright sunshine in the Rose Garden. "And the best and fairest way to make sure Americans can do that is to grant them immediate tax relief so they have more of their own money to spend or save."
Bush said his tax cuts would put hundreds of dollars a year into the hands of families.
"That money can cover a lot of bills. That money can help families with purchases they've been delaying," Bush said. "That money will be in circulation, which will be good for our economy."
The president sought to answer skeptics in Congress and in the public who fear ballooning deficits.
"In two years' time, this nation has experienced war, a recession, and a national emergency, which has caused our government to run a deficit," he said. "The best way to reduce the deficit is with more growth in our economy, which means more revenues to our treasury and less spending in Washington, D.C."
The Congressional Budget Office last month rejected that contention, saying that Bush's plan would produce deficits totaling $1.82 trillion over the next decade, which would be a drag on the economy.
Bush's plan has drawn opposition not just from most Democrats but also from some moderate Republicans who cite rising budget deficits and unknown costs from the war in Iraq.
The president is riding high on the success of the military action in Iraq, but he is clearly haunted by the memory of his father's surge in popularity after winning the first Gulf War only to lose the public's confidence when the economy stumbled.
"Political popularity can only carry a bad idea so far," Sen. John Breaux, D-La., a moderate Democrat, told reporters after Bush's speech.
He said Democrats agree that the economy needs to be stimulated, but said "the fact is that we're going to have to be borrowing the money to pass the tax cuts as we're borrowing the money for the war and prescription drugs as well."
While Congress is in a two-week recess, the president is sending 25 administration officials out to 57 events in 26 states to promote his tax-cut plan. About the same time the president was speaking in the Rose Garden, Deputy Commerce Secretary Sam Bodman was to highlight the Bush tax package at a Chamber of Commerce luncheon in Portland, Maine, home state of moderate GOP Sen. Olympia Snowe, who has vowed to block any more than $350 billion in tax cuts.
The White House had asked for $726 billion in tax cuts over 10 years. The House, which wants $550 billion, came closer to Bush's request. But the Senate cut Bush's request by more than half, approving just $350 billion.
The vote last week in the Republican-controlled Senate stung the GOP president in a time of war.
"In this debate, the goal is not to set arbitrary numbers for the package," Bush said. "The goal is to determine what our economy needs - what small businesses need, what workers need - and then to take actions necesssary to meet those needs."
Rep. John Spratt, D-S.C., the ranking Democrat on the House Budget Committee, said he was dismayed that Bush was still insisting on debt-financed tax cuts. "It is increasingly clear that the sudden re-emergence of chronic, large budget deficits is weighing down the economy," he said.
Bush also faces a skeptical public. Six in 10 Americans say this is not the time for more tax cuts, which they fear would worsen deficits, an Associated Press poll found. Still, half say their taxes are too high.
On Wednesday, the president is to sign a budget measure to finance the war and rebuilding program in Iraq and anti-terror efforts at home. Then he will fly to St. Louis to tour a Boeing Co. factory, where he is expected to talk about Iraq, his budget request and the economy.