|01-07-2002, 05:39 PM||#1|
I'm a chauvinist leprechaun
Join Date: Oct 2000
Location: Notre Dame, IN, 46556
Local Time: 06:24 AM
Bush Ignoring Domestic Issues?... Read on
I've put in an article giving evidence, or maybe just hoping to shed a little light on teh masses that 1. Bush is not, and has not been ignoring the domestic issues.. most importantly being the ECONOMY. And also.. to the left of the readers.. Your democrat friends are wanting to 'RAISE TAXES????'.. Think about that a bit, Enjoy.
Jan. 7 — Back at the White House Monday after a Texas vacation, President Bush renewed his pressure on Congress to pass a package of measures to stimulate the slumping economy. “I hope that when Congress comes back they will have listened to their constituents. ... and that Congress will realize, like me, that America is tired of partisan bickering,” he told reporters before a meeting with Federal Reserve Chairman Alan Greenspan.
REPEATING A WARNING he made last August that the federal government might be forced into deficit spending in time of war, national emergency or recession, Bush said, “We may not balance the budget for this year. It makes sense to spend money to win the war, it makes sense to spend money necessary to protect the homeland.”
CANCEL THE TAX CUTS?
Bush underscored the battle lines between himself and congressional Democrats, some of whom have called for rescinding some of the income tax rate cuts that were enacted last year.
“There some talk about raising taxes — that would be a disaster to raise taxes in the midst of a recession,” Bush told reporters.
Agreement on a stimulus plan between Bush and Senate Majority Leader Tom Daschle, D-S.D., was stymied by a dispute over how to subsidize medical insurance for jobless people, with Daschle favoring routing subsidies through the existing COBRA and Medicaid systems, while congressional Republicans, with tacit support from Bush, called for a new tax credit for unemployed people to use to purchase medical insurance.
Bush’s meeting with Greenspan came on a day when a leading Wall Street economist, Morgan Stanley’s Stephen Roache, issued a warning to clients about a double-dip recession in which the economy has a “false start” of growth followed by another downturn and more layoffs.
“I think the case for a double dip is quite compelling,” Roache said. While the economy appears ready to grow in the first quarter of this year, “following on the tendency of five of the past six recessions, I suspect this pattern could well be reversed with a double dip commencing by springtime.”
In light of Roache’s warning, Bush’s teamwork with Greenspan in trying to pull the economy out of the recession seems all the more important.
Greenspan — a former colleague of Treasury Secretary Paul O’Neill in President Gerald Ford’s administration — gave Bush an important early boost by endorsing a major tax cut last January.
CUTTING INTEREST RATES
Led by Greenspan, the Federal Reserve cut short-term interest rates an unprecedented 11 times last year. The Fed’s Open Market Committee meets again on Jan. 29 and 30.
Most analysts now expect no change in interest rates at the meeting, although a minority believe the central bank will make one final quarter-point cut.
There’s a historic irony to the Bush-Greenspan relationship: Bush’s father is said to have blamed Greenspan for not cutting interest rates quickly enough to avert the 1990-1991 recession, a major factor in his defeat in the 1992 election.
Daschle contended last week that the tax cuts signed into law last year by Bush “probably made the recession worse.”
While Daschle didn’t explicitly call for a repeal of those tax cuts, some congressional Democrats have done so — a point to which Bush has seized upon.
On a trip to California and Oregon said over the weekend, Bush declared, “Not over my dead body will they raise your taxes.”
Bush may be following the lesson learned from his father’s experience in 1991 — the elder President Bush reluctantly agreed to a tax increase proposed by congressional Democrats, including Daschle, in order to trim federal budget deficits. But that tax increase took place during the 1992 recession and arguably made it worse.
Last Friday, Daschle called for a major corporate tax cut to stimulate the economy, with employers getting a tax credit equal to the amount of money they pay in Social Security taxes for each new person they hire.
“Sept. 11 and the war are not the only reasons the surplus is nearly gone, they’re not even the biggest reasons. The biggest reason is the tax cut,” he said.
‘HIGH INTEREST RATES’
Daschle blamed last year’s tax cuts for causing “the most dramatic fiscal deterioration in our nation’s history.” “Not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse,” he said.
He contended that “the rapidly disappearing surplus is a key reason long-term interest rates have barely budged.”
“Investors understand that the dwindling surplus means the federal government may have to borrow money soon, or at the very least, won’t be paying down nearly as much of the debt as had been expected,” he said. “That is keeping long-term interest rates higher than they would have been.”
In turn, he said “the continued high interest rates” were causing “less investment, less consumption, more job loss, and bigger deficits.”
BUSINESS GROUP REBUTTAL
Daschle’s economic reasoning drew scorn from one business advocacy group.
“He makes the bizarre claim that tax cuts somehow made the current recession worse. How can that be, since the bulk of the Bush tax relief package has not yet been implemented?” asked Raymond Keating, economist for the Small Business Survival Committee, a Washington lobbying group.
The National Bureau of Economic Research, a group of economists which designates when recessions start and end, said the recession began in March of 2001.
The tax cuts, which Bush signed into law on June 7, 2001, phase in over the next 10 years.
Only 5 percent of the total tax reductions which were signed into law took effect in fiscal year 2001, which ended last September. The bulk of the tax cuts do not take place until 2004-2006, according to calculations by the Congressional Budget Office.
Daschle’s speech called for substantial increases in federal spending on public schools, public health, nanotechnology research, bioterrorism deterrence, and defense of the nation’s industrial and computer infrastructure.
He also proposed tax credits and subsidies to provide broadband service to cities and towns that do not currently have it.
Daschle did not put a price tag on his new spending proposals and tax credits.
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