At least a little bit.
President Bush will propose a $2.3 trillion budget on Monday that backs away from some of the major spending and tax initiatives he supported in prior years, administration officials say.
Constrained by big budget deficits and political realities, the officials said they would retreat on some of their own ideas and oppose others favored by Republicans in Congress.
Mr. Bush will try instead to lock in some of his prior victories, by pressing Congress for a permanent extension of most of the tax cuts adopted in the last three years that were set to expire over the next seven years. He says the tax cuts foster economic growth, which helps create jobs. But many Democrats say the tax cuts are fiscally reckless and widen the gap between rich and poor.
What about specifics?
Administration officials said Mr. Bush would not insist on his earlier proposal to overhaul Medicaid, would not push for a big expansion of retirement savings accounts and would not back tax incentives for energy production that he supported last year.
In addition, they said, Mr. Bush will oppose extending a temporary tax break that greatly accelerates the rate at which businesses can depreciate new equipment. The tax provision was enacted in 2002 to stimulate the economy and manufacturers want to retain it. At the same time, the White House is gearing up to oppose Republican plans in Congress for highway spending that far exceed what Mr. Bush wants.
Hmm, it seems to me that he's giving up more tax cuts than spending increases. Although I must say that I can't really complain about losing the depreciation benefit the article speaks of. This is what the code calls a "special allowance" and what practitioners usually call "bonus depreciation." During 2004 this will allow businesses to deduct in excess of 50% of the cost of new equipment, and some buildings, in the first years. This is a sweet deal and I've got one client who's going to pay close to $200,000 less in taxes than he otherwise would have. This is obviously good for business, but it's hard to justify on an ongoing basis. Our tax system is supposed to measure income and the "special allowance" has about as much to do with the company's actual income as does the color of the CEO's car.
This is a small favor to be sure, but it's the first sign of fiscal restraint Bush has shown in a long time. It's a start. (I hope.)