WASHINGTON, April 26 (UPI) — President George W. Bush said Saturday that the U.S. economy is not meeting its full potential as the U.S. Congress is set to reconvene in two days and debate the size of his embattled tax cut proposal.
“We know our economy can grow faster and create new jobs at a faster rate. We also know that the right policies in Washington can unleash the great strengths of this economy, and create the conditions for growth and prosperity,” Bush said during his weekly radio address to the nation.
Bush’s comment’s come at the end of a week where he has tried to salvage the size of his coveted 10-year, $550 billion tax cut package. Lawmakers in the U.S. Senate vowed two weeks ago to hold the amount of the proposal to no more than $350 billion.
“On Monday, members of Congress return from recess, and they will face some important decisions on the future of our economy. I have proposed a series of specific measures to create jobs by removing obstacles to economic growth,” Bush said.
The economy has some strengths, he said. “Lower interest rates have helped more Americans buy their own homes. Gas and other energy prices are coming down, and consumers are getting the savings immediately. Inflation is low, and America’s families are seeing their incomes on the rise,” Bush said.
At the same time, consumer confidence has lagged. Unemployment remained at 5.8 percent in February, up from 5.7 percent in January. The Conference Board’s Consumer Confidence Index declined sharply to 62.5 points in March, down 2.3 points from 64.8 in February. Some 3.5 million Americans are drawing unemployment benefits and total unemployment is 8 million.
“We experienced the shock of a terrorist attack; we have endured a recession; we had to deal with some major corporate scandals; we faced the uncertainty of war; and we have seen a slowdown in the global economy, which weakens demand for American goods and services,” Bush said. Bush traveled this week to Ohio, a state important for his tax cut proposal and his eventual re-election campaign. The state holds 21 electoral votes and is home to Sen. George. V. Voinovich, the Republican who worked with Sen. Olympia Snowe, R-Maine, to broker the deal with the Senate leadership to hold down the size of the president’s proposal.
Sen. Charles E. Grassley, R-Iowa, chairman of the Senate Finance Committee, promised the Republican moderates the tax-cut bill would include half of the $726 billion Bush had asked Congress to provide as a stimulus for the still-sagging U.S. economy. In return, moderates pledged to support the $2.2 trillion federal budget plan.
In the tight partisan split of the Senate, 51 Republicans to 48 Democrats and an Independent who often votes with the Democrats, Snowe and Voinovich are strong enough to stop Bush in the Senate. The House has already adopted a tax reduction plan favorable to Bush. Voinovich told a reporter in Ohio that Bush did not try to lobby him on the tax vote while he was there and added that “He knows where I’m at … We’re very, very good friends.”
The senator said there had been “too much focus on the stimulus package.” Voinovich said he supported the package but not for that big a tax cut. He said that if offsets could be found, lawmakers could do more than $350 billion.
Democrats also say they are not buying Bush’s tax plan. Rep. Stephanie Tubbs Jones, D-Ohio, said in a response to Bush’s radio address that the American people are not buying the administration’s massive tax cut, saying: “They are wrapping it in fancy paper and calling it a ‘stimulus package,’ or an ‘economic plan.'”
“They can dress up this tax cut any way they want and it’s still just that — a tax cut for the wealthiest one percent of Americans that does nothing to create jobs and will only sink our nation further into debt.
“A tax cut of this size, directed to the privileged few, will not help our struggling economy – no matter what it is called,” Jones said.
Bush’s plan calls for accelerating the 2001 tax rate reductions and making them retroactive to Jan. 1, 2003. It reduces the so-called marriage penalty in 2003 rather than 2008 and raises the child tax credit from $600 to $1,000 this year instead of in 2010.
The Congressional Budget Office estimates that Bush’s proposals would reduce revenues by $35 billion and increase outlays by $4 billion. Between 2004 and 2013, analysts anticipate the proposals would reduce revenues by $1.5 trillion and increase outlays by $96 billion.
The president’s proposals would add $621 billion to mandatory spending between 2004 and 2013, the CBO estimates, with Medicare and Medicaid, the federal-state health-care plan for low-income individuals, accounting for 75 percent of that increase.
Congress returns from a two-week recess on Monday. The conference committee will then begin the markup on the tax bill during which lawmakers will hammer out a final number for the president’s signature. The White House said Tuesday that it was important that a majority be found in the Senate and the House to give final passage to the plan as it emerges from the House Ways and Means and the Senate Finance committees.
“The jobs and growth plan I have proposed is fair; it is responsible; it is urgent. And Congress should pass it in full,” Bush said Saturday.
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