Bush insists on tax cuts
Draws line against Democratic spending proposals
By William L. Watts, CBS.MarketWatch.com
Last Update: 3:09 PM ET Oct. 5, 2001
WASHINGTON (CBS.MW) - President Bush on Friday insisted that the economic stimulus package being crafted in response to the Sept. 11 terrorist attacks consist of tax cuts rather than the new spending measures sought by some Democrats.
Bush, in brief remarks outside the White House, noted that measures passed since the attacks, including emergency relief, security enhancement, and an airline bailout, totaled around $60 billion.
"In order to stimulate the economy, Congress doesn't need to spend any more money. What they need to do is cut taxes," Bush said.
Bush called for acceleration of cuts in personal income tax rates set to be phased in as part of the $1.35 trillion, 10-year tax cut signed into law earlier this year. He also called for tax relief for "low and moderate-income" Americans, an apparent reference to workers who didn't receive a rebate check this year because their earnings were below the threshold for income tax liability.
On the business side, Bush called for enhanced expensing of capital expenditures and the elimination of the corporate alternative minimum tax.
He urged Congress to move "as quickly as possible."
Bush said the measures should be equal to or slightly larger than the new spending already approved. Earlier this week, he broadly outlined a call for a stimulus package worth $60 billion to $75 billion.
Treasury Secretary Paul O'Neill foreshadowed Bush's remarks earlier Friday.
"Just having more spending for the sake of more spending is not what this is about," O'Neill told reporters. "This is about adding enough fuel to our economy so that we hasten a recovery to acceptable growth rates."
Bush on Thursday proposed a 13-week extension of unemployment benefits in states hit hardest by the attacks. In an appearance at the Labor Department, he also encouraged states to sign up children for a government-run health-care program. The program already has roughly $11 billion available and unclaimed by the states.
Democrats have called for increased spending on additional unemployment benefits, health insurance for affected workers, and infrastructure projects including roads and bridges.
Administration officials, congressional leaders and top tax-writing lawmakers from both chambers were expected to resume talks Tuesday.
Senate Finance Committee Chairman Max Baucus, D-Mont., and the panel's senior Republican, Charles Grassley of Iowa, said Thursday that they hoped to have a package ready in two to three weeks.
Tax writers and congressional leaders said they would resist efforts to turn the package into a "Christmas tree" decorated with pet projects of individual legislators.
But Economist Joel Naroff questioned whether legislators would be able to concentrate solely on measures designed to jump-start the economy.
"It will be difficult to restrain the size" of the stimulus package, he said. "The only question is whether it will get at the root of the problem, which is uncertainty and fear, or whether it will contain tax cuts and spending programs that more fit members' political agendas. When politics and economics get dumped into the same pot, the stew can take on a strange aroma."
William L. Watts is a reporter for CBS.MarketWatch.com.
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