010327 Bush Gets Warm Welcome at Chicago Merc

Chicago - President George W. Bush, barnstorming the country to sell his $1.6 trillion tax cut plan, received a boisterous welcome in a hotbed of capitalism.

Traders at the Chicago Mercantile Exchange whistled, yelled and waved as the president toured the exchange trading floor and gave a brief speech devoted largely to his 10-year tax cut proposal.

“He seems like the kind of guy that a trader is,” said Kelly Lenti, a live cattle options trader. “Most traders have a lot of common sense.”

Lenti was one of about 1,500 spectators who watched the president from a spot where traders usually deal in futures contracts on cattle, pork bellies and lean hogs. Like many of the traders on hand, she cheered Bush when he discussed his tax cut plan.

“It makes sense to take some of your money and pass it back to the people who pay the bills,” Bush said as the crowd applauded.

Before speaking, the president stepped into the Standard & Poor's 500 index futures trading pit, where he shook hands and signed autographs on the trading cards usually used to record the day's dealings. Trading there briefly slowed, while the crowd's attention turned to greeting the nation's chief executive.

Danny Riley, a stock index futures trader, said the audience embraced the president's tax cut plan “warmly,” because many on the floor are in higher tax brackets and stand to save large amounts of money on their tax bills if Bush's proposal becomes law.

“With the high-net-worth individuals, it's a pretty appealing thing to people,” he said.

Bush, who spoke over the light noise of trading that continued in nearby pits, said the U.S. economy is slowing and one way to stimulate growth is to cut taxes. Traders agreed that Bush's plan would encourage more spending, but a tax cut would not necessarily channel business to the CME, another trader said.

“Investors aren't going to take their tax cut and buy cattle futures,” said Jim Duffy, a trader for 20 years.

The Chicago Mercantile Exchange has enjoyed explosive activity, with trading volume so far this year up 58% from last year. The exchange has grown despite heightened competition from overseas and the challenge of electronic trading, which threatens to supplant the colorful trading pits.

Its cross-town rival, the Chicago Board of Trade, however, has seen volume dwindle 13% in the first two months of the year compared to the same period last year.

Bush said he wants to cut the top income tax rate to 33% from 39.6% to give a break to entrepreneurs, many of whom are taxed at the highest level.

“Much of the capital that accumulates in the private sector ends up being managed by small business owners,” Bush said. “The small business is the backbone of the country.”

Many floor traders are small business owners, either trading for their own accounts or opening small brokerage firms.

Despite the enthusiastic welcome, Bush did have his critics.

Michael Quattrocki, a trader of live cattle futures and options, said the real beneficiaries of the Bush plan will not be average Americans but the wealthy.

“He's couching it in small-business-owner terms, when it really is a cut for the rich,” Quattrocki said, adding that he was angered to hear the president “talking the economy lower.”

After returning to Washington, Bush is scheduled to travel to North Dakota on Thursday and to Louisiana on Friday.

After his speech, Bush left the floor with at least one of the tools of the trader. The president received his own bright red trading jacket emblazoned on the back with the words “Improving American Futures.”

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