Bush called for urgent measures to return to growth in response to Congress' moves to cutback his planned 726 billion tax cuts over the next decade.

The war, economic recession and the aftermath of the September 11 attacks forced the United States into deficit, Bush said in a speech to owners of small businesses.

"We need tax relief of at least 550 billion dollars to make sure our economy grows," he said, arguing that the bigger tax cut he first proposed in January would create 1.4 million jobs by the end of 2004.

The "best and fairest way" to restart the economy is by encouraging US consumers to spend more, Bush said -- and the fastest way to do that is to "grant them immediate tax relief," he said.

Bush was clearly indicating that 550 billion dollars was the smallest figure he would accept, according to Tom Donohue, head of the American Chamber of Commerce.

On Friday the Senate passed a 2.2 trillion-dollar budget blueprint which limited any new tax cut to 350 billion dollars. The House of Representatives also passed its version on Friday, approving up to 550 billion dollars in tax cuts.

The move is a setback for Bush, but the president still hopes to get a figure closer to his original 726 billion-dollar proposal when lawmakers consider specific legislation.

Democrats and moderate Republicans in both chambers worry that the full Bush package would exacerbate already ballooning budget deficits.

The White House has projected a record budget deficit of 385 billion dollars in the fiscal year starting October 1, and a 1.4 trillion-dollar deficit over 10 years.

According to the bipartisan Congressional Budget Office, Bush's tax-cutting budget proposal would produce a 1.8-trillion-dollar deficit over the next decade.

The administration has said that the Iraq war and the loss of revenues caused by recession would cause the deficit of about four percent of gross domestic product.

The number of jobless is a particular concern for Bush who will go into a presidential campaign next year. About 500,000 jobs were lost in February and March alone.

Bush also indicated that he would not abandon his proposal that investors should not pay tax on share income -- a plan attacked by many Democrats as a gift to the wealthy.

However some experts, such as Brian Wesbury, chief economist at Griffin, Kubik, Stephens and Thompson, say that 350 billion dollars will not be enough to cut the share tax.

Bush was adamant however that speedy action must be taken. "Now these measures were presented to the Congress in the first week of this year. The pro-growth package was urgent in January, it's even more urgent today," he said.

"In two years, this nation has experienced war, a recession and a national emergency which has caused our government to run a deficit.

"The best way to reduce the deficit is with more growth in our economy, which means more revenues to our treasury and less spending in Washington DC."

The president welcomed budget resolutions by the Senate and House "that show real spending restraint. And now the Congress must focus on a robust and effective growth package.

"We need at least 550 billion dollars in that package because the more tax relief that goes to the American people, the more jobs we will create in this economy."

Bush spoke on the last day for Americans to submit their 2002 tax returns to federal and state governments.

SPACE.WIRE