At least one Republican, Representative Paul Ryan of Wisconsin, agreed. ³I think it¹s fine to send people their tax money back, but I don¹t think it does much to generate economic growth,² he said, adding, ³This wouldn¹t be the first thing on my wish list.² http://www.nytimes.com/2008/01/19/washington/19fiscal.html January 19, 2008 Bush Proposing $145 Billion Plan to Spur Economy By SHERYL GAY STOLBERG WASHINGTON ‹ President Bush called Friday for roughly $145 billion in tax relief for individuals and businesses that he said would ³provide a shot in the arm² for the economy, while Congressional Democrats, in a rare show of Washington bipartisanship, pledged to work with him to enact a plan quickly. Mr. Bush laid out his ideas for an economic rescue package only in broad strokes, saying the plan must be ³built on broad-based tax relief² and ³big enough to make a difference in an economy as large and dynamic as ours.² He did not use the word recession, but acknowledged that ³there is a risk of a downturn.² His comments, in the Roosevelt Room of the White House, reflected a heightened sense of urgency within the administration and on Capitol Hill about the need to stimulate spending in an economy shaken by higher gas prices and instability in the housing and credit markets. Though the details must still be negotiated, both the White House and Congressional Democrats are leaning heavily toward a combination similar to the one the administration turned to in 2001 as a recession-fighting tool. It would include a one-time tax rebate for individuals and an immediate expansion in the deductions that businesses take for investment in equipment. If Congress acts quickly, checks could be in the hands of American taxpayers as early as spring. Still, there will be sticking points. In laying the foundation for a plan rooted in tax policy, Mr. Bush held fast to a central theme of his presidency, that cutting taxes, rather than increasing spending, was the route to prosperity. Democrats, by contrast, supported an extension of unemployment benefits, coupled with tax breaks aimed at the middle class. Some reacted warily, even as they praised Mr. Bush. ³We want a balanced package: a tax rebate for the middle class and spending stimulus that jump-starts this economy quickly,² Senator Charles E. Schumer, Democrat of New York, told reporters. In declining to offer specifics, Mr. Bush acceded to the wishes of the Senate Democratic leader, Harry Reid of Nevada, who had asked him during a conference call on Thursday not to lay out a formal proposal before Democrats had a chance to coalesce around theirs. Administration officials were assiduous on Friday about refusing to comment on details, including a report that the rebate would be set at $800 for individuals and $1,600 for couples. ³I don¹t want to play, ŒIs it bigger than a breadbox?¹ ² Treasury Secretary Henry M. Paulson Jr. told reporters, adding that Mr. Bush intentionally did not release details ³because we¹re looking to be collaborative in working with Congress here.² In setting his parameters, Mr. Bush said the package should be about 1 percent of the gross domestic product, or roughly $145 billion. He said it must include tax incentives to induce businesses ³to make major investments in their enterprises this year,² as well as provide ³direct and rapid income tax relief for the American people.² Mr. Bush said his purpose was ³to keep a fundamentally strong economy healthy.² ³In a vibrant economy, markets rise and decline,² he said. ³We cannot change that fundamental dynamic. Yet there are also times when swift and temporary actions can help ensure that inevitable market adjustments do not undermine the health of the broader economy. This is such a moment.² Mr. Bush offered an important olive branch to Democrats. He did not insist that the package be linked to making his tax cuts permanent ‹ an idea that Democrats had warned would face stiff opposition ‹ but instead called on Congress to take up the issue of permanent tax cuts after passage of a rescue package. As he spoke, the members of his economic team were behind him, among them Vice President Dick Cheney, who was a prominent backer of the tax cuts Mr. Bush got through Congress in 2001 and 2003. Friday¹s announcement set Congress on a timetable much faster than the one Mr. Bush envisioned when, in an interview with reporters for Reuters two weeks ago, he volunteered that he was contemplating a stimulus package to provide a short-term push for the economy. Mr. Bush pledged to make a decision about whether a package was necessary sometime around his State of the Union address on Jan. 28. But a combination of economic and political factors conspired to thrust the stimulus package to the top of the Washington agenda. The day after Mr. Bush¹s interview with Reuters, the government released a disappointing unemployment report. That, coupled with the slide in the stock market, created a sense that Congress needed to act quickly. As Democrats began previewing their plans, the question of the stimulus package became a quiet undercurrent of Mr. Bush¹s extended trip through the Middle East. As Mr. Paulson reached out to lawmakers on Capitol Hill, Mr. Bush was receiving daily updates on economic data and reports being released back home, according to the White House counselor, Ed Gillespie. The White House staff took part in a conference call on the options being considered by Mr. Paulson on the night Mr. Bush stayed on the farm of the Saudi leader, King Abdullah. The president convened a final staff meeting to talk about the package aboard Air Force One on Wednesday as he flew home from Egypt, and he agreed to talk to House and Senate leaders on Thursday. One Republican close to the White House said Mr. Bush¹s aides concluded that it was important for the president to get out ahead of any Democratic proposals. ³The president had to define the policy and political environment and lead the Congressional Republicans,² this Republican said. Both parties see political opportunity in acting quickly. Mr. Bush¹s approval ratings may be low, but the ratings of Congress are even lower, and both sides believe that voters will look favorably on quick bipartisan action. ³There is a growing concern that the economy is deteriorating and Congress and the president must act quickly,² said one senior Democratic aide, speaking on condition of anonymity. ³We¹re not able to afford that typical drawn-out and political legislative battle where both sides first stake out hard-line positions and come together after months of debate. We need to expedite the process by trying to take the politics out of it, which in turn is good politics.² Republicans appeared to be lining up behind Mr. Bush¹s plan ‹ and, in a rare turn of events, praising Democrats. ³We have started this year in a new way,² the House Republican whip, Representative Roy Blunt of Missouri, said. But some economists questioned the wisdom of tax rebates as an effective stimulus tool. Brian M. Riedl, who analyzes the federal budget for the Heritage Foundation, a conservative research organization here, argued that rebates were essentially a redistribution of wealth and did not add anything to the economy, because the government must either levy taxes or borrow money to pay for them. ³Unfortunately, lawmakers are taking the political approach on the stimulus, which is to say they seem to be focusing on what proposals are popular than what will actually help the economy,² Mr. Riedl said. At least one Republican, Representative Paul Ryan of Wisconsin, agreed. ³I think it¹s fine to send people their tax money back, but I don¹t think it does much to generate economic growth,² he said, adding, ³This wouldn¹t be the first thing on my wish list.² But Mr. Ryan said he would vote for the plan anyway. Carl Hulse, Steven Lee Myers and Edmund L. Andrews contributed reporting. Copyright 2008 The New York Times Company -- -------------------------------------------------------- newslog archives: http://cyberjournal.org/show_archives/?lists=newslog Escaping the Matrix website: http://escapingthematrix.org/ cyberjournal website: http://cyberjournal.org How We the People can change the world: http://governourselves.blogspot.com/ The Post-Bush Regime: A Prognosis http://globalresearch.ca/index.php?context=va&aid=7693 Community Democracy Framework: http://cyberjournal.org/DemocracyFramework.html Moderator: •••@••.••• (comments welcome)
