FOR IMMEDIATE RELEASE
January 13, 2003

Contact: Josh Freed
(202) 225-4431

President Seeks Caviar and Guns as He Pushes First War-time Tax Cut since 1860s

Washington, DC – U.S. Representative Diana DeGette (D-CO) warned that Colorado could stand to lose an estimated $76 million in revenue if President Bush's economic plan is enacted.

"Our nation is at war and many states, including Colorado, face huge budget crises even as they are asked to do more to protect their citizens from the threat of terrorism. It is unconscionable that President Bush is slashing more money from states to pay for the first tax cut during war time in 140 years," said Rep. DeGette. "We as a nation need to stand united as we face the war on terror and a slumping economy. The $670 billion proposal offered by President Bush threatens to divide us by pitting the federal government against states and the wealthy few who receive tax cuts against the majority of American citizens."

The Denver area has not been immune from the slumping national economy. Employment numbers released yesterday reported that the Denver area lost 40,000 jobs in 2002. This decline is the largest drop in employment ever, standing in stark contrast to the 40,000 plus jobs that were created each year from 1993-2000.

A preliminary analysis by the Center on Budget and Policy Priorities found that Colorado could lose $76 million from the elimination of the federal tax on dividends. Colorado, and other states, could run into additional financial problems resulting from the devaluation of municipal bonds, which compete with dividend-paying stocks for investors' dollars.

Colorado faces an $850 million budget deficit for 2003 and continuing declines in revenues. Already, the state has had to slash spending by 10 percent, and stop almost all new construction projects. Colleges, universities and some state agencies have also begun reducing staff.

"President Bush wants to have both caviar and guns," said Rep. DeGette. "That kind of thinking failed for Lyndon Johnson in the 1960s. I fear it will cause even greater problems for us today."
 
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