The US President, Mr George W. Bush, launched his campaign for a $1.6 trillion tax cut over 10 years by telling listeners to his weekly radio address on Saturday that it was time "to invite everybody in" to the party resulting from the recent US economic boom.
Mr Bush has been citing his plans for a tax cut in telephone calls to international leaders to assure them he is doing everything to bring about a speedy recovery in the US economy, his national security adviser, Ms Condoleezza Rice, said yesterday.
Since Federal Reserve chairman Mr Alan Greenspan told the US Senate two weeks ago a tax cut "would do noticeable good" for the slowing economy, such a measure has become inevitable.
The question is how much it will be. The debate will now begin in earnest during what the President's aides have termed Tax Week.
With the US accumulating a huge surplus, even sceptical Democrats are prepared to support substantial cuts, but not as deep as those promised by Mr Bush during his election campaign. "There are people struggling to get into the middle class," Mr Bush said. As an example of unfairness, he cited the case of a single mother earning $22,000 a year who paid a higher rate on every extra dollar earned than someone earning $200,000 a year.
"The country has prospered mightily over the past 20 years," he said. "But a lot of people feel as if they have been looking through the window at somebody else's party."
Many Americans have felt "squeezed" because they work up to 60 hours a week and still have trouble paying their bills. "It is time to fling those doors and windows open and invite everybody in."
The Senate Democratic leader, Mr Tom Daschle, agreed with Mr Bush that "the American people deserve a tax cut", but said the President's proposal "short changes" working families by giving 43 per cent of the benefits to the wealthiest 1 per cent of Americans.
He said a family making $900,000 a year would get a tax cut of more than $46,000 under Mr Bush's plan, while an average working family would pay just $227 less in taxes.
"We are for as large a tax cut as we can afford," Democratic Senator Mr Chris Dodd told CNN yesterday, while warning that too big a cut would undo the economy.
A Republican Senator, Mr Phil Gramm, who with Democratic Senator Mr Zell Miller last month introduced a $1.3 trillion tax cut proposal that mirrored Mr Bush's measure, said the most important news since the presidential election was last Wednesday's report from the Congressional Budget Office.
This revised upwards the estimate of the burgeoning federal budget surplus, predicting a windfall of $5.6 trillion over the next 10 years and adding an extra $1 trillion to the amount available for tax cuts, paying down the national debt and increased government spending on health programmes. The report "showed that in six months Congress added $561 billion to spending over the next decade," said Senator Gramm.
"If we don't give some of this money back to working people Congress will spend the whole tax cut over the next 12 months."
Mr Bush said his tax and spending plan would keep all Social Security money in the retirement system, eliminate the death tax, and "unlock the door to the middle class for millions of hard-working Americans".
