Keep '03 tax cuts, president urges

WASHINGTON - President Bush campaigned yesterday to make the 2003 federal tax cuts permanent, saying that allowing them to expire would be harmful to an already limp economy. The message was perhaps aimed more at voters than at lawmakers.

The Democratic-led Congress has shown little interest in renewing most of the tax cuts, and Republicans are seeking to use the issue as political leverage in this year's presidential campaign. Democratic presidential candidates Barack Obama and Hillary Rodham Clinton both have called for raising income taxes on the wealthiest Americans.

Bush used the five-year anniversary of his signing of the Jobs and Growth Tax Relief Reconciliation Act of 2003, which lowered tax rates on capital gains and dividends until 2010. Congress would need to approve legislation to extend the cuts.

"The best way to deal with uncertainty is to let people keep more of their money," Bush said after a round-table discussion at the White House by current and former administration economic advisers and businessmen.

"Tax cuts have been an engine for economic vitality," he said. "Given the fact that tax cuts have worked, what will be the Congress' response?"

Edward P. Lazear, chairman of the Council of Economic Advisers, said failure to renew the cuts would amount to a tax increase.

Raising taxes, especially in an economic downturn, is ill-advised, he said.

"We can't ignore the reality, which is that we are in a slow-growth period right now," Lazear said. "I don't think this period will end up being called a recession, but there is no doubt that the economy is weaker than we would like it to be."