San Diego Union-Tribune

May 12, 2001

A-1

Tax cuts answer to power bills, Bush says
Rationale signals little aid ahead in energy plan 


By FINLAY LEWIS
COPLEY NEWS SERVICE

WASHINGTON -- President Bush yesterday said tax cuts are the quickest way to help consumers pay skyrocketing energy bills and urged Congress to pass them by the end of the month.

Appearing at a White House news conference called on short notice, Bush seemed to signal that the long-awaited release next week of the administration's energy plan would offer little immediate relief for
electricity consumers in California and the West, and motorists everywhere.

The president reacted coolly to a number of congressional Republicans' suggestions, including the idea to ease California's emission standards and cut, or possibly eliminate, the federal gasoline tax of 18.4 cents a gallon.

"This is a situation that's been developing over the years, and it's going to take awhile to correct," Bush said. "The quickest way to help people with their energy bills is tax relief. That is the quickest, surest way to do so."

Democrats criticized Bush's rationale for a 10-year, $1.35 trillion tax cut, noting that over time he has offered differing defenses for the plan as economic conditions have changed.

The budget plan approved this week by the Republican-led Congress includes $100 billion in relief for federal taxpayers this year. The president asked Congress to pass the tax cut by Memorial Day.

"George Bush is becoming a one-trick pony," said House Democratic Minority Leader Richard Gephardt. "The answer he has for everything is a tax cut."

As a candidate seeking the presidency last year when the economy appeared strong, Bush promoted his tax cut as a way to shrink the federal tax burden and the budget surplus. He said he wanted to
reward hard-working, overcharged taxpayers.

After taking office, Bush argued that a tax cut would stimulate the slowing economy.

Adding another argument for the plan yesterday, Bush opened the news conference by saying that the tax-cut plan would be "a very important way to help deal with high energy prices."

Exactly how much money the tax cut will put in consumers' pockets won't be determined until final details of the plan are worked out between Congress and the administration.

Bush, who plans to travel Thursday to the Midwest to unveil his energy plan, reiterated that the solutions to the rolling blackouts plaguing California and mounting gasoline prices at the pump nearly
everywhere involve long-range steps.

"What this nation needs to do is to build more refining capacity," Bush said. "We need more supply. We need to meet the increasing demands with better supply."

Asked specifically if he would support a Republican-sponsored bill in the House that would ease some fuel-emission standards in California, Bush was noncommittal.

"I'll listen to everybody's suggestions," he said.

He then added another plug for his tax-cut plan, saying, "I hope there is no intention to delay. There needs to be money in the pockets of our consumers as quickly as possible."

Some GOP strategists worried that California's energy crisis could imperil several House seats currently held by Republicans.

Bush acknowledged that the state faces "a serious situation," and aides said he plans to visit California sometime after Memorial Day. The president recently ordered federal offices in the state to cut electricity usage during peak hours and told his administration to speed efforts to develop new electricity-generating capacity.

He noted that the new plants now under development or on the drawing boards would be fueled by natural gas, another energy resource in short supply.

"I am working with Mexico and I am working with Canada to try to figure out ways for us to encourage exploration in our own neighborhood," he said.

Bush said his energy plan would include incentives aimed at encouraging the development of what he described as "hybrid automobiles" that would be operated, at least partially, with power sources other than gasoline.

"I'm optimistic in the long term, not only will we increase supplies, but that our automobiles will become more technologically adept at dealing with the energy situation we have now," Bush said.

Critics have noted that the president and Vice President Dick Cheney spent years working in the oil industry and contend they remain too focused on developing additional energy supplies and not focused
enough on efficiency and conservation.

But Bush seemed to side with Cheney, who stirred critics recently, including several moderate Republican congressmen, by downplaying conservation as a partial solution to the energy crisis.

"We need to encourage the development of technologies to help us conserve," Bush said. "We need to be conservation-minded in America. But I'm also going to say, as plainly as I can, we won't conserve
our way to energy independence. We must also increase supply."