Byline: Joanna Ramey

WASHINGTON — Retailers are rallying around President Bush’s long-touted, controversial $1.6 trillion tax-cut plan, formally introduced in a speech to Congress Tuesday night, agreeing with his contention that it is critical to boost the flagging economy.
“The bottom line is it would put more money in people’s pockets, which is good for the retail industry,” said Steve Pfister, senior vice president for government relations at the National Retail Federation, which is part of the business-based Tax Coalition that plans to lobby Congress for the tax cut.
Like others lobbying the issue, Pfister acknowledges that Bush’s plan to refund a projected government surplus to taxpayers over 10 years will likely emerge from Congress in a reduced form.
Morrison Cain, vice president of legal and public affairs at the International Mass Retail Association, called the tax cut “a needed step to keep the economy going.” He said it’s difficult to project how big a tax cut will emerge from Congress.
Release of Bush’s proposed $1.96 trillion 2002 budget outline Wednesday morning was followed by a Commerce Department report showing the economy in the fourth quarter of last year grew by 1.1 percent. This measure of the nation’s gross domestic product was revised downward from an earlier estimate of 1.4 percent.
In addition, in testimony on Capitol Hill Wednesday, Federal Reserve Bank Chairman Alan Greenspan said the downturn in the economy has “yet to run its full course.”
Democrats on Capitol Hill are more worried Bush’s tax cut plan overstates the projected federal budget surplus and thus will do more harm to the economy by draining needed revenue for government projects. Democrats feel Bush’s plan is weighed too heavily in favor of wealthy taxpayers and are advocating tax relief worth around $750 billion.
Aside from the Bush administration throwing its support behind replacing the antiquated U.S. Customs Service cargo processing computer, the outline of President’s 2002 federal budget contains scant details about what government programs affecting the fashion industry might be cut, created or expanded. A more detailed budget will be released in April.
Bush’s budget is also calling for cuts in agency funding in order to help pay for proposed increases in spending on education, defense and other pet programs. His budget is calling for cuts in most agencies ranging from 5.9 percent for the Commerce Department to 11.4 percent for the Transportation Department.
In the Treasury Department’s budget, the funding blueprint did note that Bush wants to insure that “the automated processing system used by the United States Customs Service” be part of the agency’s “robust management” for technology projects.
The document didn’t spell out how much money the administration wants Congress to allocate for the Customs computer, which is prone to brown outs that delay processing of cargo. Retailers and other importers had little luck convincing the Clinton administration to support funding the $1.2 billion needed to replace the computer, without levying a user fee. Last year, Congress approved $130 million toward the project.