WHITE HOUSE: LINDSEY UNEMP FORECAST DID NOT COME FROM FED
--Retransmitting Story Initially Sent 16:52 EST Thursday
By Denny Gulino
WASHINGTON (MktNews) - The White House Thursday afternoon said an Oregon senator's assertion earlier in the day that National Economic Council chief Lawrence Lindsey was circulating unpublished Federal Reserve unemployment forecasts on Capitol Hill is mistaken.
A White House spokesman said "that is not an accurate characterization" of what happened and that any Fed numbers "would be private" and not given to members of Congress.
Lindsey, in a luncheon meeting with members of Congress Wednesday, did make the case that passage of President Bush's proposed tax cut "has a strong relationship" to the economy, the spokesperson told Market News International.
As reported earlier, Sen. Gordon Smith, questioning Treasury Secretary Paul O'Neill about the tax cut proposal in a hearing of the Senate Budget Committee, said, "Yesterday at our lunch we had Larry Lindsey and he shared with us which I believe he represented as Alan Greenspan numbers as to unemployment projections if we don't do this tax cut."
Smith continued, "I think the whole world ought to hear this. As I best recall his statement, if we don't do this tax cut unemployment will go up from its current level, 4.5%, to nearly 6.5% by November of 2002. Is that correct? Is that a projection you've heard?"
O'Neill answered, "No, I have not seen those numbers from Alan. And, I'm really careful about the conversations I have with him and I've not seen those data.
Sen. Smith asked O'Neill to come up with Treasury projections of unemployment and went on, "I believe he said if we do the Bush tax cut unemployment will rise roughly to 5, 5.5%. The difference there is literally millions of American citizens and their jobs and I think the American people ought to know what it is, what we are doing will have on the private-sector economy."
O'Neill then offered that, "I do not want to see us go to an unemployment rate over 5%. I would hope we can get on with seeing our economy revived because it's so important to everything else that we care about."
Smith said he recalled seeing the Nasdaq begin to "fall in half" beginning in March and the Dow industrial fall a large amount as well since then, and then asked, "I understand that all of our economic indicators peaked last September and all of them are headed south now?"
O'Neill answered, "That's true."
The exchange ended with Smith, a Republican, endorsing the tax cut proposal. Sen. Smith had not immediate comment on the White House explanation. |
