Bush defends tax cut; Democrats criticize it

Bush defends his tax cut in a speech Sunday in Pittsburgh.

PITTSBURGH, Pennsylvania (CNN) -- President Bush defended his administration's tax cut as "the right thing to do" Sunday as Democrats argued it eroded the federal budget surplus and threatens Social Security and Medicare.

During a tour of a Pittsburgh steel plant, Bush said little he has not said before. But his new defense of the tax cut suggested that Democratic attacks, including a recent critical television ad, are getting the attention of the White House.

"You see, there's a big debate in Washington about the money in Washington. Sometimes folks up there lose sight about whose money it is," Bush said. "That money's not the government's money. It's the people's money. And we did the right thing with sharing that money with the people who pay the bills."

For weeks, Democrats have charged that Bush will have to dip into the Social Security and Medicare trust funds because the economy is slowing and because the budget surplus is shrinking -- a fact they blame on the Bush tax cut.

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The White House estimates this year's budget surplus will be $158 billion, down from an earlier estimate of $281 billion. Nearly all of that is money devoted to Social Security.

"The disturbing thing about the Bush forecast is that we are not just looking at the cyclical downturn -- a return to budget deficits because the economy is down," Rep. John Spratt, D-South Carolina, said on "Fox News Sunday."

"Even after the economy is back on its feet and grows -- upon their assumption of the rate of 3.2 percent a year -- even then, we still have a negative bottom line after you back out Social Security and Medicare, as we think he should," Spratt said.

Gene Sperling, former economic adviser to President Clinton, criticized Bush's "excessive tax cut" Sunday.

The president mingles with the crowd at a Pittsburgh steel plant.

Sperling said it means breaking a "commitment" by raiding the surpluses for Medicare and Social Security. Sen. Pete Domenici, the ranking Republican on the Senate Budget Committee, said that's not the case.

"Frankly, there is plenty of money in the federal budget for Social Security until the year 2037," Domenici said on CNN's "Late Edition with Wolf Blitzer."

"Right now, as much money as is needed for Medicare will be spent for Medicare. It'll only be used for that," he said.

Republicans released their own television ad -- scheduled to begin a limited run Monday -- that defends the president against the Democratic charges.

"He's protected every penny of Medicare and Social Security and still left the second-biggest surplus in history," the ad says of Bush. "But Democrats, who for years supported budgets that spent all Social Security money and left no surplus, are now launching partisan, misleading attacks on President Bush."

Lawrence Lindsey, Bush's chief economic adviser, predicted the sluggish economy would show new signs of life this fall, and he credited the administration's tax cut for the anticipated revival.

"You know, again, the tax cut took effect, not last quarter, which is the quarter we're talking about, but just now .... People have been out there spending," he said on "Fox News Sunday."

"I think the third quarter's going to be better than the second quarter. I think the fourth quarter [will be] better than the third, and next year, when the monetary policy kicks in, I think we're going to have sustained, rather robust growth," Lindsey said.