Larry Kudlow
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President Bush continued his bold pre-November offensive this week, focusing our attention on the war, national security, the totalitarian regimes in the Mideast and even taxes.

Talking about the potential for a Democratic shift in Congress, the president warned a Florida audience: "If they get control of the House of Representatives, they'll raise your taxes. It'll hurt our economy. And that's why we're not going to let them get control."

The president also warned that Democrats would raise taxes in a futile attempt to balance the budget: "They will raise your taxes and figure out new ways to spend your money." He then added the real money line, good supply-sider that he is, "The best way to balance the budget is to keep pro-growth policies in place."

Bush is doing a great job this political season. His polls are rising everywhere, as are the numbers for congressional Republicans. The House GOP 2006 contract on TradeSports.com is up to nearly 57 percent, from 38 percent two weeks ago. That's an amazing turnaround, and huge credit goes to Bush.

On all topics, it seems the Bush message is resonating. In particular, it's nice to see him claiming ground on the economic front. This is territory he fought for, and he shouldn't give it up.

This week on CNBC, I asked prospective Democratic Ways and Means chair Charlie Rangel if he would roll back the Bush tax cuts on capital gains and dividends. Rangel deflected the question, speaking instead about raising the cap on the alternative minimum tax. Earlier, in a Bloomberg news interview, Rangel said he "cannot think of one" of Bush's tax cuts that merit renewal -- another crafty answer since the investor tax cuts aren't up for renewal until 2010.

Rangel, who emphasizes the need for bipartisan tax, budget and entitlement cooperation, knows the president will veto any tax-hike proposal while he is still in office. (By the way, bravo for Rangel's trashing of Hugo Chavez and his patriotic defense of Bush.)

Indeed, the chance of any tax-cut rollback is pretty thin. But Bush is being politically savvy when he warns Americans about the Democrats' fiscal wish list. On the economy, Bush knows he has the argument, data and momentum on his side.

Oil and gasoline prices have plunged over the past month, taking away a big Democratic issue. The broad stock averages have had a nice run since Labor Day and are closing in on five-year highs. This rally is a measure of the future economy and business profits, and it signals continued growth as far as the eye can see. And while investors are abandoning the energy sector, consumers are spending -- making the retail stock index one of the hottest plays on Wall Street.

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Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.
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