Bush unveils $674 billion stimulus plan
( 2003-01-08 08:08) (7)
President Bush on Tuesday proposed a $674 billion plan to lift the U.S. economy out of the doldrums by eliminating taxes investors pay on dividends, speeding income tax reductions and assisting the unemployed.
"The need for this plan is urgent," Bush told the Economic Club of Chicago.
Bush's "growth and jobs" plan was denounced as a windfall for the wealthy by Democrats who said it would provide no immediate help to the economy and swell the budget deficit.
"He (Bush) says it will give the economy a shot in the arm. I think it will give the economy a shot in the foot," said Senate Democratic Leader Tom Daschle of South Dakota.
Saying urgent action was needed, Bush called for the acceleration of across-the-board rate cuts, a $400-per-child increase in the tax credit for families with children, and more generous incentives for small businesses to invest in new equipment. The rate cuts would be retroactive to Jan. 1.
"The role of government is not to manage or to control the economy from Washington, D.C., but to remove obstacles standing in the way for faster economic growth ... and those obstacles are clear," said Bush, whose re-election in 2004 could hinge on how well the U.S. economy rebounds.
Bush's proposal set off a major debate in Washington over how best to deal with a U.S. economy struggling with a 6 percent unemployment rate and Americans wary of investing in a three-year bear market.
The White House Council of Economic Advisers predicted the plan would create 2.1 million jobs over three years, but Democrats were not so sure.
"To use the need for an immediate economic stimulus as an excuse to enact costly new permanent tax breaks for the wealthy is a cynical and disheartening ploy," said Democratic Sen. Edward Kennedy of Massachusetts.
Many economists already expect this fiscal year's deficit to hit $300 billion or more, eclipsing the current record of $290 billion in 1992.
|
