Will Bush Bite the Bullet on Taxes?

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Bush waves to the crowd as he outlines his economic agenda and tax cut plan

George W. Bush may be finally putting your money where his mouth is.

"I strongly support the idea of backdating tax relief to get cash into consumers' hands as quickly as possible," the President told the Kalamazoo Chamber of Commerce on Tuesday afternoon. "We need an immediate stimulus for our economy."

In an economic address billed by the White House flacks Monday as "major," Bush hit all the big themes. The economic slowdown — including the energy crisis and the stock market's tank-o-rama — was Clinton's fault, not his ("The trend is clear and the need for action is urgent") and all his tax-cut sales-pitching has not made things worse. "It's the President's job to look for warnings of economic trouble ahead and to heed them," Bush said. (Not that he didn't feel the need to point out the bright side for a change, saying the economy "is like a great athlete at the end of the first leg of a long race — winded, but fundamentally strong.")

This is what we've been waiting for, folks — an acknowledgment that his $1.6 trillion tax cut needs some tweaking before it can provide the sort of immediate economic stimulus Bush keeps telling us we need to turn the national frown upside down.

Not a moment too soon. According to a new Washington Post/ABC News poll, the President's approval rating is up slightly, to 58 percent from 55 percent a month ago. But his disapproval rating has jumped 10 points to 33 percent — and that spikes to 50 percent when it comes to how Bush is handling the economy. (And how's this for consumer confidence: 58 percent fear we're headed into a recession.)

We want our tax cut yesterday

Of course, he hasn't been handling the economy at all so far, just saying unkind things about it to whet the public appetite for his tax cut. And the tenor of his assessment isn't about to change now. In Kansas City on Monday, Bush gave a familiar short version, saying "I believe the economy has slowed down and we better do something about it." A tax cut anyone?

Since the winter, Bush has relentlessly invoked the economic stimulus of tax cuts while making no structural changes in his tax cut — which, in its current House-approved form, provides only $5.6 billion in retroactive benefits for 2001, while the "downturn, baby" is actually happening. And Senate Democrats have finally gotten around to calling his bluff, planning Tuesday (before Bush speaks) to unveil a $60 billion retroactive tax cut that they say can go into effect immediately.

Is that a tax cut or a drop in the bucket?

So much for waiting for the whole budget before considering tax relief. But Bush — whose Kalamazoo address was scheduled 10 days ago — is in danger of losing the initiative on his own brand of economic stimulus. Surely his experts have told him that $5.6 billion in 2001 for 200 million taxpayers does not a consumer spending spree make. So what's been the holdup?

Two months ago, when the tax-cut wrangle started to get serious, the White House vowed that their $1.6 trillion baby was a people's tax cut, of "the right size," and the business lobby (no doubt receiving a promise to be first in line next time around) dutifully returned to the sidelines empty-handed. And so the White House has been leery of reopening negotiations on the tax cut's size and shape, for fear the corporate folk will come rushing back in.

How much is enough?

Bush is expected to insist that any retroactive instant tax cut be tied to his 10-year plan. The administration says that's to make sure the American people know that the $60 billion (about $300 a head, which is mostly psychological) is just a down payment. But the bigger danger for a White House that's tied a 10-year tax cut to a one-year (we hope) slowdown is that once the $60 billion cavalry rides in, all Bush's hard work in bad-mouthing the economy to advance his agenda will have been wasted. He will have pulled the trigger. And the public-opinion scales will tip back toward the Democratic argument for fiscal caution.

No wonder that Larry Lindsey, Bush's chief economic adviser, told USA Today on Monday that the President's prized estate-tax repeal was likely to be put off a few years. And that last week, Bush for the first time declared himself receptive to a "trigger."

This week, though, it's more of Round Two of Bush's blackmail-the-legislator tour, in which he takes the stump in the home state of an influential (and wavering) senator or representative and urges cheering crowds to write or call said senator/representative in support of Bush's tax cut.

Maybe they'll like the new version even better.