Bush, Economic Team Push Tax Cuts
Bush, Economic Team Push Tax Cuts
Feb. 07, 2003
WASHINGTON (AP) _ President Bush and his economic team made a new pitch Friday for their $1.3 trillion package of tax cuts, seeking to counter criticism that the plan is too expensive and too tilted toward the wealthy.
Bush used his annual economic report to Congress and a public swearing-in ceremony for his new Treasury secretary, John Snow, to argue that Congress should quickly pass his new round of tax cuts in order to give a feeble economic recovery an added boost.
``Many family budgets are strained in America today. Too many small businesses are struggling just to stay afloat,'' Bush said.
The president wants to have many of the tax cuts in the 10-year, $1.35 trillion package Congress passed in 2001 take effect this year. He also wants to make the tax relief, due to expire in 2010, permanent.
Bush is also seeking to slash taxes on corporate dividends and provide two new savings incentives beyond Individual Retirement Accounts and 401(k) plans to bolster savings.
The president noted the good news Friday that the unemployment rate had dropped unexpectedly from 6 percent to 5.7 percent in January, but he said the economy was still growing too slowly to generate enough new jobs.
``We will not be satisfied until this economy grows fast enough to employ every man and woman who seeks a job,'' Bush said.
Bush selected Snow in December to replace his first treasury secretary, Paul O'Neill, who was ousted in a shake-up of the administration's economic team. The president said Snow would ``be on point in working with the Congress.''
O'Neill, who was often criticized by Republicans for straying off message, was fired by Bush after he had publicly expressed doubts about the wisdom of pursuing another round of costly broad-based tax cuts.
Snow, on the other hand, has expressed wholehearted support this week for the entire tax package, both during a round of congressional hearings and in his brief remarks at the swearing-in ceremony.
``Swift enactment of this plan is my No. 1 priority,'' said Snow, the former head of railroad giant CSX Corp.
The administration on Friday announced a tax cut lobbying blitz over the next two weeks, led by Snow, Commerce Secretary Donald Evans and Stephen Friedman, the new head of the president's National Economic Council. Those officials will be part of a group of 15 to 20 Cabinet and sub-Cabinet officials who will be visiting 20 cities around the country to talk about the need for Bush's program.
A number of Republican lawmakers, whose votes Bush will need, especially in the closely divided Senate, have expressed reservations about the overall cost of the proposal and its most controversial elements, the reduction of taxes on dividend payments and creation of new types of savings accounts that would allow couples to put away as much as $30,000 per year.
In its new budget, the administration estimated the cost of all of Bush's tax cut proposals over the next 11 years as $1.34 trillion.
Presidential spokesman Ari Fleischer rejected suggestions that Bush may end up having to jettison portions of his tax cut proposals, which Democrats have charged would drive up the deficits while providing most of the benefits to America's wealthiest families.
``The president is going to fight for the plans he submitted to the Hill,'' Fleischer told reporters.
The president also devoted a full chapter in his annual economic report to describing the benefits the tax cuts would have on long-term economic growth.
Glenn Hubbard, chairman of the president's Council of Economic Advisers, the panel that prepared the economic report, dismissed complaints that the president's tax program was too expensive in light of the sharp reversal in the government's economic fortunes. The administration's new budget projected record deficits of $304 billion this year and $307 billion for 2004.
In the tax chapter, the council argued that eliminating the double taxation of dividends would bolster long-term growth by making stock purchases more attractive, thus helping to lift the country's savings rate.
The administration's economic report, which did not make any assumptions about what a possible war with Iraq would do to the U.S. economy, projected moderate growth this year of 3.4 percent compared to growth of 2.9 percent last year, when the economy is measured from the fourth quarter to the fourth quarter of each year.