US Treasury Secretary Mr Paul O'Neill said the Bush administration would not agree to delay tax cuts as part of an effort to aid the flagging US economy.

A day after President Bush gave two speeches urging adoption of an economic plan that would cut taxes further, Mr O'Neill criticised a Democratic alternative that would provide some tax breaks but also attempt to check the federal budget deficit.

Although Democrats have not specifically proposed delaying tax cuts approved earlier this year, Mr O'Neill rejected any move in that direction. "That's basically rescinding tax cuts that were passed by the Congress. Doesn't make any sense to me," Mr O'Neill said on NBC television.

With polls showing Americans increasingly preoccupied with the state of the economy, and with a congressional election looming in November, the leaders of both political parties have been quick to take up the theme of economic recovery.

Senate Majority Leader Mr Tom Daschle on Friday called for spurring the economy with short-term tax cuts for selected groups and increased spending on security. He said the administration's $1.35 trillion (€1.6 trillion) tax cut played a big role in the economy's deterioration and stressed prevention of budget deficits.

Mr Bush hit back at Mr Daschle in speeches in California and Oregon on Saturday, faulting him for blocking a $214 billion economic stimulus plan and charging the Democrats with a veiled attempt at raising taxes. "Not over my dead body will they raise your taxes," he said.

While Mr Daschle did not call for a rise in taxes or a repeal of the president's tax cut, Democrats said a delay of future tax breaks should be considered as political leaders debate their next step.