Tax Cuts Lose Spot On GOP Agenda
War, Medicare, Social Security Expenses Loom

By Jim VandeHei
Washington Post Staff Writer
Monday, March 7, 2005; Page A01

President Bush and Republican lawmakers are being forced to temper their anti-tax ambitions, as the party that consolidated power in Washington by promising to shrink government grapples with the high cost of its efforts to expand the Defense Department and the nation's two largest entitlement programs.

The president's only new tax initiative for the second term -- a broad restructuring of the tax code -- will be crafted in a way that results in a simpler system, not lower taxes, White House aides said.

At the same time, Bush's call for Congress to make permanent all the tax cuts enacted in his first term faces increasingly strong resistance among some Republicans concerned about rising deficits. The chairmen of the Senate Budget and Finance committees said in interviews last week that Republicans might wait until next year, or later, to consider the Bush plan, because the cuts do not expire until the end of the decade.

And, for the first time in years, Lindsey O. Graham (S.C.) and other Senate Republicans are advocating increasing taxes -- as a way to pay for a restructuring of Social Security. Bush has not ruled out backing the effort.