Lott plan includes cuts in taxes

Associated Press and The Washington Post

WASHINGTON — The Senate’s top Republican suggested Monday that Congress consider coupling a reduction in the Social Security payroll tax with a cut in capital gains taxes to give the struggling economy a fresh infusion of cash.

Meanwhile, a new poll finds a majority of Americans say they are prepared to roll back President Bush’s $1.35 trillion tax cut to help deal with the shrinking federal budget surplus.

"There are people, at the entry level, who are hit very hard by the payroll tax," Senate Minority Leader Trent Lott told reporters. "If you’re trying to get money into working people’s pockets quickly, that’s one option you could consider."

"The president is moving forward on his plan that promotes economic growth and protects Social Security, but he has not closed the door on other ideas," spokesman Scott McClellan said in Jacksonville, Fla., where President Bush was promoting his education agenda.

Republicans have been pushing to cut the capital gains tax, which now tops out at 20 percent, to 15 percent for two years as an economic stimulant and to boost government revenue as people sell investments. Many Democrats criticize that proposal as tilted toward the wealthy and worry about the long-term costs.

Rolling back a portion of the payroll tax that goes to Social Security and Medicare would give a tax cut to more than 30 million workers — most earning less than $44,000 a year — who were left out of this year’s $40 billion in tax rebate checks because they didn’t have enough taxable income to qualify.

In a survey released Monday, the majority of those polled — 57 percent — said they would support reducing the size of the tax cut to deal with the disappearance of the non-Social Security surplus.

The Washington Post-ABC News national survey found that only 33 percent have a positive view of the economy, a 17-point drop since late July and a 37-point drop since January, when 70 percent of those surveyed gave the economy positive ratings.

More Americans say they now trust the Democrats in Congress (50 percent) than Bush (44 percent) to deal with the economy.