Bush Turns Focus to Economy

President Bush urged Congress to quickly pass at least $550 billion in tax relief, less than the president had hoped to get but more than many lawmakers say they are willing to give as deficits increase to pay for war in Iraq and stimulate a sluggish economy.

"The nation needs quick action by our Congress on a pro-growth economic package," Bush said in a Rose Garden speech at the White House. "American workers and American businesses need every bit of that relief now."

Entrepreneurs represent "one of the great strengths of this country," Bush said, adding that small business owners understand "that this economy has a great deal of unmet potential."

The speech marked the return of the president's focus to his economic stimulus plan -- a switch after nearly two months of almost single-minded attention to the war. The president's $726 billion package was sliced in Congress as the White House had its focus diverted to war.

With major combat at an end, the president is redoubling his efforts to see the bulk of his package passed.

Bush made clear, however, that he is not losing focus on Iraq and other countries the White House has deemed a threat to global security.

Saying that just one month ago Iraq was a "prison for its people, a haven for terrorists and an arsenal of weapons," the president said, "today the world is safer. The terrorists have lost an ally."

"These are good days in the history of freedom," he said.

It may, however, be too late for Bush to push larger cuts. The House has approved a $550 billion plan. Last week, Vice President Dick Cheney broke a Senate tie to cut the president's plan to $350 billion in tax cuts.

House GOP leaders are at odds with Senate Finance Committee Chairman Charles Grassley, R-Iowa, who vowed to Senate moderates that he would not increase the tax cut plan while the 2004 federal budget is being sorted out.

Sen. John Breaux of Louisiana, a moderate Democrat, said that while there is some agreement on certain elements of the president's tax cut package, including a child tax credit, marriage penalty and rate reductions, disagreement remains over the dividend tax reduction.

"While it's good politics, it ought to be good public policy... over half [of the president's package] is for a dividend tax cut. That's fine in the long term but it's not stimulative," Breaux said.

House Democratic Leader Nancy Pelosi of California said like the president's 10-year, $1.3 trillion plan of two years ago, this too will not provided the needed stimulus.

"It has been said that doing the same thing over and over again and expecting a different result is the definition of insanity, but a better result is precisely what the Bush administration claims will happen.  It will not," she said.

Bush said the "best and fairest way" to remedy weaknesses in the economy is to make sure Americans get immediate tax relief so they have more of their own money to spend or save.

"Instead of lowering taxes little by little, the Congress should do it all at once and give the economy the boost it needs," Bush said. "It's not if we have a package, it's how big the package is going to be." The president wants Congress to provide Americans with marriage tax relief, raise the annual child credit and eliminate double taxation of dividends.

"Taxing corporate income once is fair," he said. "It is not fair for the federal government to tax the same money twice."

The thinking is with more money in investors' hands, more investment will occur and more taxpayers will feel free to spend.

"Economists say this plan will help our stock markets, and since half of American families own stock, the reform will help them save and help our economy grow," Bush said.

The president's plan -- devised to help 92 million Americans put more money in their pockets and to create 1.4 million jobs by the end of 2004 -- said that growth is essential to fight back the triple whammy that afflicted the American economy in the past two years.

"In two years time, this nation has experienced war, a recession and a national emergency, which has caused our government to run a deficit," Bush explained. "The best way to reduce the deficit is with more growth in our economy, which means more revenues to our treasury and less spending in Washington, D.C."

The Congressional Budget Office disagrees, arguing last month that the president's plan would produce deficits totaling $1.82 trillion over the next decade.

Asked whether the Senate deal for a $350 billion package would derail the president's plans, White House spokesman Ari Fleischer said Monday it would not.

"Clearly, a tax bill that has only $350 billion worth of tax relief in it will not create as many jobs as a tax bill that has $550 billion or higher for the American people. And the higher the tax number, even in excess of $550 billion, the more jobs will be created, and that's what the president's going to fight for," he said.

Fleischer added that reducing the tax cuts from $550 billion to $350 billion would cost 425,000 jobs in the next two years.

A recent AP poll found that 61 percent of Americans say they'd rather wait on tax cuts while war continues, as budget deficits have grown due to the conflict. Half of Americans say their taxes are too high, the same AP poll revealed.

Budget deficits have grown nearly $80 billion with war funding approved by Congress last week. The supplemental also includes additional funding for anti-terror efforts, homeland security and airline relief.

The president is expected to sign the supplemental Wednesday.

"The American people are overtaxed. And the president also believes one of the best ways to create jobs in the economy is to continue to stimulate the economy," Fleischer said.

Deputy Commerce Secretary Sam Bodman on Wednesday also highlighted the Bush tax package at a Chamber of Commerce luncheon in Portland, Maine, the home state of moderate Republican Sen. Olympia Snowe.

Snowe has said she would reject any more than $350 billion in tax cuts. Twenty-five administration officials will fan out to 26 states for 57 events while Congress is on Easter recess.

On Wednesday, Bush will fly to St. Louis to tour a Boeing factory, where he is expected to address the Iraq situation, his budget request and the economy. Bush will later spend four nights at his Crawford, Texas, ranch.

Fox News' Julie Asher and The Associated Press contributed to this report.