When $200 billion doesn't go far

NEW YORK - Now that the U.S. war with Iraq is over, President Bush has sharpened his focus on the economy, particularly his push for a bigger tax cut than the one recently passed by the Senate. Bush claims the bigger cut will lead to more job growth, but economists aren't so certain.

Though Bush is unlikely to get the $726 billion tax cut he originally wanted, he can at least rest assured that the debate over whether to cut taxes is history. The only questions now are which taxes will be cut and how big the cuts will be.

Bush makes the argument seem like a simple one -- if a $350 billion tax cut will create jobs in an economy that desperately needs them -- about 2.6 million people have lost their jobs since March 2001, when a recession began -- it stands to reason that $550 billion would create even more jobs.

"Some in Congress say the plan is too big. Well, it seems like to me they might have some explaining to do," Bush said in a speech Thursday at a Canton, Ohio, ball-bearing factory. "If they agree that tax relief creates jobs, then why are they for a little bitty tax relief package?"

But the issue is a bit more complicated than that. Most experts agree that, if the Senate gets what it wants, limiting tax cuts to $350 billion, the less-controversial cuts would be the most likely parts of the plan to pass. Those include an acceleration of tax-rate cuts scheduled for 2004 and 2006, the reduction of the so-called "marriage penalty" and an increase in child-care credits.

Left out in the cold, in that case, would be the president's plan to eliminate most individual taxes on dividends. Bush and his supporters say cutting or eliminating these taxes would provide an immediate boost to the stock market, which would only help the economy.