Canton Repository

April 19, 2003

Bush set to visit Canton Thursday

By PAUL M. KRAWZAK
Copley Washington correspondent

WASHINGTON — President Bush plans to travel to Canton on Thursday to deliver a pitch for his proposed tax cut and apply pressure to Sen. George Voinovich to change his mind on the proposal.

Voinovich, R-Cleveland, is one of two GOP senators who are threatening Bush’s efforts to win congressional passage of a tax cut of at least $550 billion over 10 years.

Bush, facing re-election next year, believes a tax cut of that size is needed to stimulate economic growth and create jobs. Voinovich, however, said he favors limiting the reduction to $350 billion to avoid long-term damage to the economy.

The trip to Canton will be Bush’s first since he was elected president. He visited Canton on June 16, 2000, while campaigning for president. The president also is expected to visit the Lima Army Tank Plant operated by General Dynamics Corp. while in Ohio.

Rep. Ralph Regula, R-Bethlehem Township, who represents Canton, said Bush’s visit will benefit the area.

“I love to have presidents come here,” he said. “It’s great for our community, and it brings attention to Stark County and the 16th District. I’d love to have a presidential visit every couple of months.”

Unsure of why Bush selected Canton for a visit, Regula said it might be because he is the state’s lawmaker with the most seniority. Regula has served in Congress for 30 years. He also is vice chairman of the powerful House Appropriations Committee.

White House officials Friday declined to confirm the visit. They did say that Bush would be traveling outside Washington late next week to discuss his economic-growth plan and the war in Iraq. No details of where Bush would speak were available.

The trip to Canton is a highlight of what has been described as an all-out effort by the administration to win passage of a tax cut that would feature the elimination of the individual tax on dividends. Other provisions in the $550 billion package favored by Bush would accelerate income-tax reductions already in the legal pipeline and provide a variety of tax breaks for families and small businesses.

Earlier this week, Bill Lash, an assistant secretary of commerce, promoted the plan in Cleveland, Athens, Cincinnati and Columbus. Peter Fisher, an undersecretary in the Treasury Department, will deliver a similar pitch in Cleveland on Thursday.

Although Bush originally asked for a $726 billion tax cut, the White House has indicated it could go along with a $550 billion reduction endorsed by the House.

The key problem for the administration is in the Senate, which last week approved a budget resolution that in effect limits the tax cut to $350 billion as advocated by Voinovich. Such a move would effectively rule out the White House’s hopes of abolishing individual dividend taxes.

Voinovich and Sen. Olympia Snowe, R-Maine, refused to support the budget resolution until they won a promise from Senate leaders to keep the tax cut under $350 billion. If Voinovich and Snowe could be persuaded to change their minds, the tax cut favored by Bush would pass, supporters of the plan say.

Voinovich has contended that exceeding the $350 billion limit imposed by the Senate would dangerously enlarge the federal deficit, which is projected to reach almost $400 billion next year.

But in a sign that Voinovich would like to find common ground with the administration, Scott Milburn, his spokesman, said the senator favors expanding the tax cut beyond $350 billion if the additional reductions could be paid for through offsetting cuts in spending.

Not only does Voinovich favor a dividend tax cut in principle, but he also wants “as big a tax cut as possible” this year, Milburn said.

Last week, Regula joined most other Republican congressmen in approving a budget resolution that endorses a $550 billion tax cut. But he is not committed to Bush’s proposal, he said.

Regula expressed sympathy for Voinovich, who he said has credibility. “I respect his point that we don’t want to add a lot of debt for future generations,” he said.

Regula would prefer a lower dividend tax cut, one that would exempt perhaps the first $10,000 of dividends from taxation, he said. In addition, he favors accelerated write-offs on equipment and investment tax credits for employers, which he said would encourage small businesses to create jobs.

He said he is waiting to see what tax cut proposals emerge from Congress later this year before deciding what he will support.

Voinovich won’t be attending the Canton event, even though the White House invited him, his office said. The senator already had scheduled a trip to a Veterans hospital in Dayton, where he is participating in a roundtable on health-care quality and presenting a benefits check to a veteran.