"President Bush and Republican lawmakers are being forced to temper their anti-tax ambitions, as the party that consolidated power in Washington by promising to shrink government grapples with the high cost of its efforts to expand the Defense Department and the nation's two largest entitlement programs.

The president's only new tax initiative for the second term -- a broad restructuring of the tax code -- will be crafted in a way that results in a simpler system, not lower taxes, White House aides said.

And, for the first time in years, Lindsey O. Graham (S.C.) and other Senate Republicans are advocating increasing taxes -- as a way to pay for a restructuring of Social Security. Bush has not ruled out backing the effort. (http://www.washingtonpost.com/wp-dyn/articles/A12185-2005Mar6.html)

Many governors are facing large deficits and rising costs, especially for Medicaid, which provides medical coverage to low-income Americans. Indiana Gov. Mitchell E. Daniels Jr. (R), Bush's budget director in the first term, recently drew the wrath of conservatives by proposing a 29 percent increase in the state income tax rate on the richest residents. Republican governors in Colorado and Alabama have championed tax boosts as well."