Bush aide said economic stimulus, aid to airlines have become first order of business

Tuesday, September 18th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ A week after terrorists attacked the nation, President Bush has ordered his staff to begin grappling with the economic consequences. An economic stimulus plan and assistance for struggling airlines are the first orders of business, a top aide said Tuesday.

``We are moving from a week where we dealt with rescue efforts to dealing with the broader responsibilities of the long-term effects on the economy,'' presidential counselor Karen Hughes said during an interview in her West Wing office.

She said there is a consensus in Washington to produce an economic stimulus package, though Bush has not decided what course of action to take. Republicans lawmakers are pushing a series of proposals, including cutting capital-gains taxes.

``We're just exploring the options now,'' she said.

The White House has established a ``domestic consequences group,'' headed by deputy chief of staff Josh Bolten, to study fallout of the Sept. 11 attack. The group, which includes Hughes, will meet daily while Bush prepares for war against terrorists.

The group met Monday to discuss ways to help the airline industry, which was crippled by the aviation shutdown following the attacks and now must deal with a prolonged period of reduced passenger loads and added security expenses.

The House is considering legislation providing at least $15 billion in grants and credit to the industry.

``We want to stabilize the industry,'' Hughes said. She said that means helping to improve airlines' security and financial situations.

The White House has declined to take a position on the legislation, because aides are still trying to determine how much and what type of aid should go to the airlines.

Bush advisers say they want to be careful about bailing out companies that were in financial trouble before the attacks. However, the officials say they are just as worried about the psychological impact on Americans if airlines begin shutting down, as well as the effects on the U.S. economy.

``I think the word bailout is not one I would use,'' Hughes said, choosing her words carefully. ``There were problems in the industry before this occurred.

``There may be some short-term things that absolutely need to be done'' to help the industry, she said. ``But you don't want to subsidize ... bad business practices.''

White House advisers are still consumed by the tragedy, with little attention being paid to the rest of Bush's agenda.

But Hughes said that will begin to change next week, when education reform, patient rights and other issues will start getting attention at the White House.