By Dan Froomkin
Special to washingtonpost.com
Thursday, August 9, 2007; 2:54 PM

President Bush said today that he is not considering cutting corporate taxes -- but rather is beginning to mull over a proposal that would simplify IRS rules for corporations while not reducing their overall tax burden.

At a surprise press conference this morning, Bush disputed the impression left by a Washington Post report that he was considering a plan to cut corporate tax rates. "If you read carefully the penetrating report," he said, "[I] made it clear that we're at the very early stages of discussion and that in my own judgment, anything that would be submitted to Congress, if submitted at all, would have to be revenue-neutral. And therefore what we'd really be talking about is a simplification of a very complex tax code that might be able to lower rates and at the same time simplify the code, which is like shorthand for certain deductions would be taken away."

Here is the transcript of the press conference. And here (exclusively on the Internet) is the transcript of Bush's roundtable discussion with reporters yesterday, upon which The Post story was based.

Here's what Bush said about taxes yesterday: "I think there's a chance that we may be able to devise a simplification that will enable us to have a tax code that is more competitive and, at the same time, either without raising or decreasing revenues to the treasury. That's really going to be the, I think, determinant factor of whether or not we can go forward with some kind of legislation.

"I know it's in the country's interest to begin a serious dialogue, and that's what [Treasury Secretary] Hank [Paulson] has done. The fundamental question you ought to ask is, will we be in a position of developing a legislative package that has a credible chance of succeeding? And I don't know yet, because we've just started the discussions. I'm inclined to want to push hard, but I've got to know, push hard on what? And today literally is the first day that Hank brought the findings from the group."

So in other words: No actual tax cut -- at least in part because Bush recognizes there's no way Congress would go for it.

Bush made relatively little news at today's press conference, held shortly before he headed off on vacation first to Maine and then to Texas. More on this tomorrow, but a few takeaways:

* Bush joined the " I can't recall" brigade when he was asked when he learned that former NFL player Pat Tillman, who died in Afghanistan in April 2004, was the victim of "friendly fire" rather than enemy action. "I can't give you the precise moment, but obviously the minute I heard that the facts that people believed were true were not truth, that I expect there to be a full investigation and get to the bottom of it," Bush said. More than three years and seven investigations later, the family still doesn't know the truth about Tillman's death or the cover-up.

* Bush was asked about his commitment to accountability in light of his commutation of former vice presidential aide I. Lewis "Scooter" Libby's sentence for obstruction of justice, his loyalty to Attorney General Alberto Gonzales, and his failure to hold anyone accountable for mistakes in Iraq. Bush said that Libby was held accountable. "He was declared guilty by a jury and he paid -- he's paid a high price for it." He asked of Gonzales: "Why would I hold somebody accountable who has done nothing wrong?" And rather than address who was responsible for the mistakes in Iraq, he shifted into a long and repetitious recital of his feelings about the universality of freedom and the threat that withdrawal from Iraq poses to the homeland.

* When it came to Iraq, Bush said at least one thing that was untrue, and one thing that was only too true. "In the July 15th report that I submitted to Congress, there were indications that they had met about half the benchmarks and some of the political benchmarks they were falling short," he said. The White House's own report found "progress" in only eight of 18 benchmarks -- not that the benchmarks had been met. And even that assessment is highly debatable. By contrast, Bush expressed a keen awareness of public sentiment about the Iraq government: "A lot of Americans look at it and say: There's nothing happening there; there's, like, no government at all -- I expect they're saying." Bush then attempted to refute that notion by pointing out that the central government has sent money to provincial governments.

* Bush was asked about an International Committee of the Red Cross report first described by Jane Mayer of the New Yorker, in which the treatment of prisoners at CIA interrogation sites is called "tantamount to torture." Bush's response in full: "I haven't seen it. We don't torture."

* Bush had an unusual take on the 19 al-Qaeda members in their 20s and 30s, most from Saudi Arabia, who carried out the 9/11 terror attacks. In the midst of a long explanation of why winning in Iraq is so important, he said: "It matters to the security of people here at home if we don't work to change the conditions that cause 19 kids to be lured onto airplanes to come and murder our citizens." Kids? Lured? And how is the war in Iraq changing conditions in Saudi Arabia?

Some initial reports: Jennifer Loven writes for the Associated Press: "A week after a deadly bridge collapse in Minneapolis, President Bush dismissed Thursday raising the federal gasoline tax to repair the nation's bridges at least until Congress changes the way it spends highway money."

AFP reports: "President George W. Bush on Thursday warned Iraqi Prime Minister Nuri al-Maliki against being too conciliatory with Iran after he appeared in Tehran for talks with senior leaders.

"'If the signal is that Iran is constructive, I will have to have a heart-to-heart with my friend the prime minister because I do not believe they are,' Bush said at a White House news conference."

William Branigin writes for The Washington Post: "President Bush today called on the Iranian people to reject their hard-line government, saying they 'can do better' and need not be isolated by a leadership that destabilizes its neighbors and pursues a suspected nuclear weapons program." (Bush has said this before.)

Peter Baker writes in The Washington Post: "President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.

"Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was 'inclined' to send a corporate tax package to Congress, although he expressed uncertainty about its political viability. . . .

"In a 48-minute conversation on an array of economic issues, Bush also warned China not to start a trade war, blamed Congress for not doing more to shore up infrastructure such as the bridge that collapsed in Minneapolis last week, and pushed back against Democratic presidential candidates who are promising to renegotiate the North American Free Trade Agreement.

"The focus on economic issues on Bush's last day in Washington before leaving town today for most of the rest of the month reflected a White House strategy to confront Democrats on tax and spending issues. With most of his second-term domestic legislative agenda in tatters and his strategy in Iraq under bipartisan fire, Bush appears eager to return to familiar issues that animated the beginning of his presidency and might rally disaffected Republicans behind him again."

Steven R. Weisman writes in the New York Times: "The president said he . . . discussed with Mr. Paulson and other cabinet members the possibility of tax cuts and reduced regulations aimed at overcoming what some see as a weakening of the competitiveness of American capital markets compared with those overseas. But he was cautious about saying what he might propose.

"'We worked through possible suggestions for Congress to think about,' Mr. Bush said. 'It may be an issue that requires a lot of selling to get the conditions right for people to even take it seriously.'"

What was Bush's main message yesterday? Weisman reports: "Bush, seeking to reassure Americans about the economy and combat Democratic criticism of his policies, said on Wednesday that recent financial market turbulence was not a cause for worry but a natural adjustment from the improvident lending of recent years. . . .

"It was an unusual presentation for Mr. Bush, both politically and economically. Presidents are usually advised not to wade into discussions of markets at a time when they are so unpredictable and anxiety-inducing. . . .

"Asked about collapsing housing markets, and the risk of them declining further, Mr. Bush said: 'In a way it's a necessary reaction to a flood of liquidity that came into the market in the past couple years.' That was financial jargon referring to the past several years of easy money, some of it from overseas, at low interest rates.

"Mr. Bush said that as a result of the deep pools of money available, 'housing got really hot' and that a decline was inevitable. He added that 'if the market functions normally' it will lead to a soft landing. 'That's kind of what it looks like so far,' he contended."

Deborah Solomon writes in the Wall Street Journal (subscription required): "President Bush shrugged off concerns about stock-market turmoil, saying Wall Street is adjusting to a flood of liquidity and is beginning to 'readjust its assessment of risk.'

"Mr. Bush, seeking to reassure jittery investors who have watched the market gyrate wildly, said the volatility is natural but the economy is strong and there is enough liquidity to absorb the ups and downs.

"'If markets are given a chance, they will adjust in a way that is a necessary reaction to a flood of liquidity that came into the market over the last couple of years,' the president said during a briefing with reporters at the Treasury Department. . . .

"Mr. Bush dismissed recent polls showing that U.S. citizens are feeling sour about the economy. A recent Wall Street Journal/NBC News poll showed that more than two-thirds of U.S. citizens believe the U.S. economy is either in recession now or will be in the next year.

"He said he understands 'there's disquiet out there' but attributed much of the economic anxiety to concerns about the war in Iraq. 'I happen to believe the war has clouded a lot of peoples' sense of optimism.'"

Krishna Guha and Andrew Ward write in the Financial Times that Bush "sought to draw broad political dividing lines on tax, public spending and free trade, accusing Democrats of plotting the biggest tax increase in US history, endangering the solid economic growth achieved over the past four years. . . .

"The remarks appeared aimed at reclaiming the initiative in the debate over economic policy at a time when Democrats are seeking to exploit widespread pessimism among middle-class Americans about the direction of the US economy.

"'I will use the veto to keep your taxes low and keep federal spending under control,' he said in a public statement."

Bush also swatted softballs from Fox News host Neil Cavuto yesterday. Here's the video. Cavuto starts off: "I notice in the heat, you just don't sweat."

Here's a sobering story.

Robin Wright writes in The Washington Post: "Fourteen months after Secretary of State Condoleezza Rice offered to talk to Iran, the failure of carrot-and-stick diplomacy to block Tehran's nuclear and regional ambitions is producing a new drumbeat for bolder action, including the possible use of force.

"The emerging debate -- evident in an array of new reports, conferences and commentaries -- is still in the early stages, but some of the language urging the Bush administration to be more aggressive during its final 17 months is reminiscent of arguments from think tanks and commentators that shaped the case for invading Iraq.

"'A lot of people were willing to give diplomacy a chance, but at some point there have to be results,' said Weekly Standard editor William Kristol, an advocate of the Iraq war. . . .

"Rice and Defense Secretary Robert M. Gates are committed to economic sanctions and pressure through the United Nations. But proponents of tougher policy reflect the views of a small part of the Bush administration open to military options if Iran does not suspend a uranium-enrichment program that can be subverted for a nuclear bomb.

"The drumbeats are also louder because of Iraq. . . .

"'Discussions about attacking Iran began with the nuclear issue, but it has now become a silver bullet to also deal with Iran's activities with Iraq, Syria, Hezbollah and Hamas, and even to provoke a process of regime change,' said Augustus Richard Norton, a retired Army colonel now at Boston University.

"A possible timetable has emerged as well. 'The consensus I'm hearing is to give the [U.N.] Security Council process more time but not unlimited time, and, at some point in the spring of 2008, there has to be a good hard look at whether that process should continue and whether other options should then be considered,' said Kenneth Katzman, a Middle East expert for the Congressional Research Service."

Here are some of the examples Wright provides of the drumbeat: Michael Rubin of the American Enterprise Institute; Kori Schake in the Hoover Institution's Policy Review; the Heritage Foundation Web site and Norman Podhoretz in Commentary.

The article does not include any quotes from the wide range of experts -- essentially, almost everyone who's not a neoconservative -- who believe a U.S. attack on Iran would backfire even more spectacularly than the Iraq war has. Such an attack, those experts say, could set off a wave of terrorist attacks here while further radicalizing the Iranian leadership, rendering the Middle East even more chaotic, and making the U.S. even more of an international pariah.

For contrast, consider this startling blog post for TPM Cafe by the dean of the Woodrow Wilson School at Princeton University, Anne-Marie Slaughter: "Here is my nightmare. The Cheneyites succeed in creating a situation in which Bush does decide to bomb Iran. Iran retaliates, as they openly threaten to do, with terrorist attacks against us on U.S. soil. That tilts the election. I can imagine a Karl Rove political calculation that would buttress a Cheney-Addington national security calculation, probably with Eliot Abrams' support.

"This scenario is one that any Democrat, of any type, and any moderate Republican . . . should be taking seriously and fighting against."

Washington Monthly blogger Kevin Drum puts Slaughter's comment in context: "Let me get this straight. Anne-Marie Slaughter, one of the most accommodating, serious, centrist, liberal foreign policy players on the planet, has just said that she thinks it's entirely possible that the Bush administration will launch a foreign war next year in order to help the Republican Party win an election. . . . [T]he Bush administration is now so widely viewed as unhinged and malignant that even traditionally serious(TM) people like Anne-Marie Slaughter think nothing of suggesting that they might well start a war with Iran for purely partisan gain. I really can't think of any past administration that would have provoked this kind of reaction from someone of AMS's stature. Journalists should take note."

(For my views on the media's responsibilities on these kinds of issues, see this piece I wrote for NiemanWatchdog.org, where I am deputy editor.)

Aziz Hug writes in the Nation that Congress's recent surrender on warrantless surveillance is just "the most recent example of the national security waltz, a three-step Administration maneuver for taking defeat and turning it into victory.

"The waltz starts with a defeat in the courts for Administration actions. . . . The second step does not follow immediately. Rather, some months later, the Administration suddenly announces that the ruling has created a security crisis and cries out for urgent remedial legislation. Then (and here's the coup de grace) the Administration rams legislation through Congress. . . . that not only undoes the good court decision but also inflicts substantial damage to the infrastructure of accountability. . . .

"To those who have followed this Administration's legal strategy closely, the outcome should be no surprise. The law's most important effect is arguably not its expansion of raw surveillance power but the sloughing away of judicial or Congressional oversight. . . .

"Like the Constitution's Framers, this Administration understands that power is accrued through the evisceration of checks and balances."

Kara Oppenheim writes in the Hill: "Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) Wednesday set an Aug. 20 deadline for the Bush administration to produce documents related to the panel's probe of the National Security Agency's wiretapping program.

"'Despite my patience and flexibility, you have rejected every proposal, produced none of the responsive documents, provided no basis for any claim of privilege and no accompanying log of withheld documents,' Leahy said in a letter to White House Counsel Fred Fielding."

David S. Broder writes in his Washington Post opinion column: "Ever since the race began taking form last winter, the awkwardly large number of real and pretend aspirants to succeed George W. Bush as the GOP standard-bearer have behaved as if they were vying for the endorsement of Bush and Dick Cheney."

But, Broder asks, have the Republican candidates forgotten what comes after the primaries?

"[T]his winter, one of these men may face an interesting dilemma. How do you reposition yourself after hugging Bush and Cheney for a solid year? What do you do to become suddenly the candidate of change?

"The one thing on which the polls are clearest today is that this country is ready to turn the page on the Bush-Cheney experience. If ever there has been an administration that has outstayed its welcome, exhausted its energies and spent most of its original ideas, it is this one. People on the inside are holding on by their thumbs, and the country's patience is about exhausted."

Sheryl Gay Stolberg writes in the New York Times: "The official line from the White House is that 41, as he is known in Bush circles, gives advice to 43 only when asked. But interviews with a broad range of people close to both presidents -- including family members like the elder Mr. Bush's daughter, Doro Bush Koch, and aides who have worked for both men, like Andrew H. Card Jr. -- suggest a far more complicated father-son dynamic, in which the former president is not nearly so distant as the White House would have people believe.

"They talk almost every morning by phone, and Mr. Bush studiously avoids saying anything critical of his son, close associates say. But he has privately expressed irritation with some of his son's aides. At times, he has urged White House officials to seek outside advice, and he has passed on his own foreign policy wisdom to the president, even as he makes a point of saying his son's administration is not his. . . .

"As to what is said in private conversations between father and son, no one can be certain. When phone calls come in from Houston or Kennebunkport, White House aides make themselves scarce. But [former chief of staff Andrew] Card says it is clear to him that family talks were not always confined to family matters.

"'It was relatively easy for me to read the sitting president's body language after he had talked to his mother or father,' Mr. Card said. 'Sometimes he'd ask me a probing question. And I'd think, Hmm, I don't think that question came from him.'"

Peter Baker writes in The Washington Post: "All morning, the question resonated around the White House: Would he call or wouldn't he? Turns out he would.

"President Bush telephoned Barry Bonds yesterday to congratulate him on breaking Hank Aaron's home run record and then publicly hailed him as one of the game's best sluggers.

"Never mind the allegations of past steroid use that still dog the San Francisco Giants star. Bush said he will leave it to others to judge whether Bonds's record will be marked by an asterisk. And while some tried to read much into the fact that the president did not immediately call the morning after Bonds hit his 756th homer, Bush quickly passed off the delay as the simple courtesy of not wanting to wake someone on West Coast time."

Lawrence K. Altman writes in the New York Times: "Though President Bush has had episodes of mild vertigo in recent weeks, they have not interfered with his work, and he is in excellent health, the White House said yesterday in releasing findings from his annual medical checkup.

"The bouts of unsteadiness, which were reported as having improved, began after Mr. Bush had a viral infection in June at the Group of 8 meeting in Germany, the White House said. Such dizziness often follows viral infections, usually of the upper respiratory tract, and can last a few weeks. The symptoms may be continuous or intermittent."

David Brown writes in The Washington Post: "President Bush was treated a year ago for what appears to have been Lyme disease, the White House said yesterday in disclosing the results of his annual physical exam.

"A report of the president's recent medical examination said his case had 'complete resolution' and was 'without recurrence' since being treated last August. The illness, an infection carried by deer ticks that is prevalent in the Northeastern United States, had not been previously revealed."

Overall, however, as Alex Pareene blogs on Wonkette.com: "The President's medical history was released today -- and he's in considerably better shape than us."

Bob Minzesheimer writes in USA Today: "First lady Laura Bush and daughter Jenna Bush are writing a children's book about a boy who doesn't like to read. It is based on their experiences as teachers."

From Myeverything.com, Bush's recent press conference -- about zombies.