Posted 11:09 a.m. Feb 4

By Shaphan Marwah
U-WIRE (DC BUREAU)

(U-WIRE) WASHINGTON – President George W. Bush’s federal tax cuts came under attack in Congress last week, following the Congressional Budget Office’s report that the expected surplus had fallen $4 trillion to $1.6 trillion for the next decade.

Debate focused on whether or not the government could afford the $1.7 trillion tax cuts passed last June, amid a recession and the current “war on terror.”

“It was enacted in what now seems a very different and distant time,” Sen. Edward M. Kennedy (D-Mass.) said in a speech at the National Press Club last month, calling for a “return to fiscal responsibility.”

Other lawmakers voiced concern that if the tax cuts aren’t postponed, the government will be unable to ensure adequate funding of social welfare programs without incurring a greater budget deficit.

“The Bush administration is setting us on a path to use $1.1 trillion of Social Security and Medicare trust fund surpluses to pay for the tax cut,” Sen. Kent Conrad (D-N.D.) said in a press release last week. “We must find a way to return fiscal discipline to the budget and be in a better position to make good on the government’s promises to the retiring baby boom generation.”

Rep. Jim Nussle (R-Ind.) responded in a recent press release by saying that raising taxes to avoid a deficit was equivalent to “taxing our way out of economic recession,” arguing that “the economy drives the budget, not the other way around.”

Bush cautioned Congress not to “play politics with tax relief” in a press conference early last month and defended the tax cuts as “part of the economic recovery plan.”

“The way out of this recession,” Bush said in his State of the Union Address, “is by speeding up tax relief so people have more money to spend.”

That sentiment was echoed in a recent article by Heritage Foundation budget expert Brian Reidl, who said, “economic growth, history clearly shows, can either be encouraged with lower taxes — or strangled with higher ones.”