READ his lips. President Bush--still dizzy from a week of flip-flopping on the budget--is now saying again that he opposes new income taxes. But times have changed since his earlier (and since-broken) campaign pledge. Congressional Democrats now can regain the initiative in American politics by supporting new income taxes. President Bush either will have to support a tax hike for the wealthiest Americans or become the ultimate bad guy in the budget battle.

The House is about to pass a budget proposal that cuts capital gains taxes and raises income taxes for high income brackets. The plan would eliminate the "bubble" that taxes income over $194,00 less than income over $71,900--a clearly inequitable part of our tax system. It is a plan that puts the partisan debate over the budget in the starkest terms: which party is willing to throw the government into insolvency to protect the few who profited the most from the excesses of the 1980s?

AT THIS point, there is little rational reason for Republicans to oppose the Democratic plan. The House proposals call for a combination of increased income taxes on the rich and a capital gains tax cut. According to conservative theory, the richest Americans would not lose money as long as they increase their capital gains investments sufficiently. But the majority of House and Senate Republicans still refuse to make this compromise--primarily because their political careers rest on mindless and irresponsible "no new taxes" soundbites.

With the Democratic solution on the table, it will be the the President and his party's fault for prolonging the budget crisis. Bush is the chief executive. Let him act the part. If he is unwilling to compromise, let him veto tax reform.

Then, let Bush try to explain to the American people why saving a few dollars for people making more than $120,000 a year is so important that it merits halting the entire government and throwing thousands of government employees out of work. Let him justify his budget plan, which unfairly burdens the poor and middle class.

Let him try to convince anybody three weeks before the elections.

Bush's approval rating may have plummeted after he agreed to new taxes, but it will hit zero when he takes his defense of elite America to the American public. Democrats have a golden opportunity to reclaim their populist identity as the party of the working and middle classes in America. By supporting tax equity and fairness, they can focus attention on solving domestic problems that have been neglected too long. Rather than spout empty tax rhetoric that nobody believes anymore, Democrats can begin to address the problems that President Bush has abandoned.

And win elections in the process.