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Tax hikes not an answer to big deficit, Bush says

USA Today Jan. 20, 2006 12:00 AM

STERLING, Va. - Offering a sneak preview of his economic State of the Union, President Bush said Thursday that budget deficits do not justify tax increases.

"The best way to solve the deficit is to grow the economy, not run up your taxes," Bush told a friendly crowd, saying he will again press Congress to make his tax cuts permanent.

The White House Office of Management and Budget projected last week that the federal budget deficit will climb back above $400 billion when Bush proposes his annual budget in February. The office blamed the cost of Gulf Coast hurricane recovery.

Robert Bixby, executive director of the non-partisan Concord Coalition, a group that advocates a balanced budget, called it inconsistent for Bush to push permanent tax cuts when he is responsible for such major expenses as the Iraq war and the new Medicare drug benefit.

"There's no connection between the administration's tax policies and its spending policies," Bixby said.

Speaking at a family-run moving and storage firm, Bush cracked jokes during a 74-minute presentation that included a question-and-answer session.

Bush, preparing to deliver his State of the Union speech on Jan. 31, used the event to sound some of his economic themes. He said he will ask Congress to expand tax-free health savings accounts to make them "more attractive, more portable, more individualized."

He discussed his continuing efforts to limit lawsuit liability and restrict federal spending.