DEMOCRATS call on Bush to detail a plan for economic recovery

Sunday, September 9th 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ Democrats are stepping up efforts to blame President Bush for the faltering economy, even suggesting he resubmit his budget to reflect the disappearing surplus.

Senate Majority Leader Tom Daschle said Sunday that administration's actions are directly responsible for the current downturn.

``Clearly, when you make the U-turn that the president did last spring, you can expect a U-turn in results,'' Daschle, D-S.D., said on ABC's ``This Week.'' ``So clearly we're in a box, and I think the president now is recognizing that we're in a box, and we have to find a way out.''

White House officials have said the tightening economy just puts more pressure on Congress to spend prudently. Privately the administration is considering calling for across-the-board budget cuts next year if the economy worsens, Bush advisers said last week.

Democrats blame Bush's 10-year, $1.35 trillion tax cut for the nation's economic woes and suggest Social Security reserves are in jeopardy.

Projections by both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office show that the non-Social Security part of the nation's budget surplus essentially has evaporated.

Since Congress returned to work after Labor Day, Democrats and the administration have been fighting over who is responsible for the economic rut.

The nation's unemployment rate grew to 4.9 percent in August as job losses in manufacturing passed 1 million for the yearlong slowdown. The increase in the monthly jobless rate was the biggest in six years.

Sen. John Kerry, D-Mass., said Bush needs to resubmit a budget that has ``numbers in it that are real.'' He also said that there is little Democrats can do to boost the economy.

``There is nothing that we Democrats can do by ourselves because we have only a one-vote margin in the Senate and he has a veto pen,'' Kerry said on CBS' ``Face The Nation.'' He also said it was clear the Bush budget would mean spending money from the Social Security surplus.

Senate Minority Leader Trent Lott rejected the notion that Bush is responsible and said the surplus will remain untouched.

``Well, as a matter of fact, the downturn in the economy started 13 or 14 months ago,'' Lott said on ABC. ``The budget we're dealing with right now, where we see an effect by the declining surplus, actually is one we voted on last year.''

Lott said there would be no need to use money from the Social Security surplus to cover all of Congress' priorities. He suggested that cutting the tax on investments _ called the capital gains tax _ would increase tax revenue and help Congress deal with the shrinking budget surplus.

Republicans believe many taxpayers would take advantage of the temporarily lower rate to sell investments, raising billions of dollars.

``I am for the capital gains tax rate cut, which, by the way, would spur growth, and bring in additional revenue, certainly, in the short term, everybody agrees with that,'' Lott said.

White House spokeswoman Jennifer Millerwise said Bush ``will remain open-minded'' about a capital gains tax cut.

``He also believes the (income) tax cut and the fed reserve's rate cuts are the right remedy and will encourage the growth needed to bring the economy back,'' she said.

Millerwise declined to go beyond those comments when asked about the remarks by Daschle and Kerry.