House Majority Leader wants larger tax cuts

House Majority Leader Dick Armey: "We need to look at what we can do to move the economy along at a better pace. We certainly are capable of achieving more."

From CNN Capitol Hill Producer Ted Barrett

WASHINGTON (CNN) -- House Majority Leader Dick Armey, R-Texas, restated his belief Monday that the tax relief package working its way through Congress should be larger than the $1.6 trillion advocated by President Bush.

"We need to look at what we can do to move the economy along at a better pace," he told reporters. "We certainly are capable of achieving more, and there's room within the $5.6 trillion surplus to look beyond the $1.6 trillion number."

Armey declined to say how much bigger he believed the cut should be, but added he thought the amount of relief could be boosted by increasing the retroactivity of the tax cuts and by expanding the limits for tax-free contributions to retirement programs.

DOCUMENT President Bush's tax proposal Documents in PDF format require Adobe Acrobat Reader for viewing.     RESOURCE Whitehouse.gov: President Bush's budget blueprint     INTERACTIVE How will Bush's proposal affect your tax bracket? Compare: 2001 budget vs. Bush's proposed 2002 budget     IN-DEPTH CNNfn: Tax Time     MESSAGE BOARD Taxing and spending

Armey's position puts him at odds with Bush and House Speaker Dennis Hastert, R-Illinois.

He said Congress should add a program to expand 401k and IRA retirement plans at a cost of $50 billion over 10 years.

"That's not a big-ticket item, but I think it's a pretty good engine for the economy, if you can move it," said Armey, a former economics professor.

Armey also said he is "critically aware of the high-tech sector not performing at the level it can," adding that allowing businesses to write off expenses associated with upgrading software might give the sector a boost.

Armey also suggested he is interested in re-introducing a capital gains tax cut, which is not part of Bush's tax package.

"Anytime investors can anticipate a better take home return from their activity they are going to be more inclined to do [invest]," he said.

Armey said he would lobby the White House, the House leadership and the House Ways and Means Committee to support his larger package.

"If we can demonstrate that by virtue of the economy's performance and the availability of the revenues, that there is more that we can do, I think we can convince the White House to go along with it," he said.

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