George W. Bush didn't become president-elect until this week, and won't become president until January, but work on the tax cuts he promised during the campaign began two weeks ago.

        Vice President-elect Richard Cheney told NBC's Meet The Press Dec. 3, “We may well be on the front edge of a recession here. And I would hope that would change people's calculations with respect to the wisdom of the kind of tax cuts that Gov. Bush has recommended.”

        Mr. Cheney implied a tax cut might be the perfect stimulus to keep the economy from shrinking, but the equation is far more complicated.

        The Bush camp has to sell the idea to a divided Congress, Wall Street, the Federal Reserve, and American voters — the plurality of whom voted for Mr. Bush's opponent.

        And there are mathematical equations, as well: A slowing economy might reduce estimates of a $2.2 trillion 10-year federal budget surplus. Mr. Bush's across-the-board tax cut might cost $1.3 trillion and new spending programs — an expanding Medicare prescription drug plan, for instance — might cost $470 billion.

        Fixing inequities in the alternative minimum tax might cost $300 billion, and add another few hundred billion dollars for all the tax cuts passed last year by a Republican Congress — and vetoed by President Clinton — such as repeal of the estate tax and elimination of the marriage penalty.

        Together, all those wipe out the estimated surplus. “We are not going to get every tax cut that Republicans have talked about between Congress and Gov. Bush,” said Clint Stretch, the director of tax policy for the accounting firm Deloitte & Touche.

        The slowing economy may be a thin rationale for a tax

        cut. “The economy's still in great shape,” said David Wyss, chief economist at Standard & Poor's in New York.

        But in some places, it'll feel like a recession. “The economy is slowing, and that means there will be some regions and some industries that experience some pain” — in particular, parts of the Midwest where the auto industry is big, said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.

        Still, with slower growth and big surpluses, “I think from the standpoint of fiscal policy, the new president will be tempted to do something” for the economy, said Kenneth Mayland of Clearview Economics in Cleveland.

        If unemployment ticks up and the budget surplus comes in at current forecast of $275 billion or more, “the combination of all that makes a tax cut of some sort, of some magnitude, likely next year,” he said.

        A tax cut passed in 2001, how ever, wouldn't reach taxpayers until 2002, and the economy then could be stronger.

        Mr. Stretch, who watches Capitol Hill in Washington for Deloitte & Touche, said the mechanics of a tax cut will be complex.

        And then comes Mr. Bush's first budget. “That's going to be the marker, when he has to put a dollar expression to what he wants to do,” he said.

        And Wall Street has yet to weigh in. Mr. Stretch said the sentiment on Wall Street favors using budget surpluses to pay down federal debt before cutting taxes, as does Federal Reserve Board Chairman Alan Greenspan. If that doesn't appeal to Congress, tax cuts are favored over higher federal spending, he said.

        “When I visit with people who are in the financial community, they talk a lot about the benefits of continued gridlock,” Mr. Stretch said. “They look at the 50-50 Senate and the very close margins in the House and they say "This is really good; they won't do a lot.'”

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