President Bush says the nation's economy needs the boost that a tax cut of at least $550 billion would provide.
That's less than the $726 billion in tax cuts he originally demanded. The retreat reflects growing congressional reluctance to run up larger deficits in wartime.
Speaking to small business owners in the Rose Garden, the president said the tax cuts are needed to put more money in consumer's hands, thereby stimulating the economy. He says the money that American families would save "can cover a lot of bills, a lot of purchases they've been delaying."
The president says the best way to reduce the deficit is to adopt pro-growth fiscal policies while curbing government spending.
The $550 billion in tax cuts, while far less than what he originally proposed, is still well above the $350 billion level approved by the Senate.