In middle America, mixed views on tax cut

Only 18 months years ago, he built his attractive store on land that used to be part of the steel mill. Flowers, however, are a discretionary purchase, and not one that people make when they're out of work. As business slowed last year, he laid off one of his workers. Mr. Kohn says this past December was especially difficult since many companies did not send their usual gift baskets. "Anything to stimulate spending would be wonderful," he says.

Dean McDermott, president of his own discount brokerage firm in the center of Bethlehem, says several of his customers are relieved by the Bush plan. One female senior citizen derives part of her income from dividends. "She's very happy they may be tax free," he says. And Mr. McDermott himself is pleased since he is the father of a 10-week-old son. Under Bush's plan, the child-care tax credit may be increased by $400 a year.

But there are also plenty of skeptics in the town. One is Roxanne Ouellette, a waitress at the Blue Anchor Family Restaurant. As she mops the counter, she says her first reaction to the Bush plan is "ha, ha, ha." She and her husband, a truck driver, make about $70,000 a year. Even though they might see a reduction in their tax rate, she isn't optimistic yet. "I've heard this before. I've got to see it before I believe it."

Northampton County Executive Glenn Reibman doubts the Bush plan will do much for Bethlehem, which is part of his county. He would rather see it aimed at lower- and middle-income taxpayers. "Do rich people spend?" he asks. "I think they tend to save," he answers.

Still, if the stock market were to respond to the Bush proposal, it might help the county. In the past, the county put profits from its investments into its pension fund. But with the market down, it has had to take money out of its general fund.

Before Bush's speech in Chicago on Tuesday, Thomas Hyclak, an economics professor at Lehigh University, was doubtful the Bush program would do much. "I'm a Democrat," he said as he sat down to watch the speech on television. "It's not clear the Bush plan addresses the problem of excess capacity for the telecom companies around here."

However, as Bush began enumerating his proposals, Mr. Hyclak started to change his mind. He thought small business, an important part of the local economy, might benefit from an increase in the amount they can write off for equipment purchases. He was particularly enthusiastic about Bush's proposal for reemployment accounts, which could result in up to $3,000 for job training, job hunting, or even moving expenses. "Conceivably, it's a very good idea," he says.

By the end of the speech, he was not ready to change parties. But "for Bethlehem," he said, "I think the tone is right, and the direction is right."

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