Bush Optimistic About Economy
Tuesday, March 27th 2001, 12:00 am
By: News On 6
BILLINGS, Mont. (AP) -President Bush was offering a cautiously optimistic assessment of the economy Tuesday, calling it ``winded, but fundamentally strong'' and contending that his policies on education, energy and free trade were critical for its continued health.
Bush was sharpening his arguments for his package of tax cuts and restrained federal spending in a state-of-the-economy address in Kalamazoo, Mich.
The sweeping overview was designed to spell out what the president views as the economy's strengths and weaknesses, and make the case for his tax cut proposals. Bush was also reminding the nation anew that the economy began to cool before he took office.
Bush's has proposed 10-year, $1.6 trillion tax reduction. In recent days, the White House has signaled willingness to make the income tax components retroactive to swiftly pump up the economy.
Administration officials have also said they might be willing to delay Bush's repeal of the estate tax to make way for a larger and quicker income tax break aimed at spurring the economy this year.
``But I want to stress, it's a matter of delay, and it's not delay for 25 years,'' White House economic adviser Lawrence Lindsey told USA Today. ``It's a delay for maybe a year or two.''
The president has said in recent weeks that the economy is ``sputtering'' and has argued that tax cuts could bolster it.
``The American economy is like a great athlete at the end of the first leg of a long race _ winded, but fundamentally strong,'' Bush was to say Tuesday, according to aides. ``My policies face reality as we found it and lay the foundation for future growth.''
Recent polls suggest the public has concerns that Bush's talk of a struggling economy may be having an effect on public confidence. Almost six in 10 in a CNN-Time poll said his talk was having an effect on the economy, including six of 10 independents and three of four Democrats. Half of Americans approve of the way Bush is handling the economy, while four of five in an ABC-Washington Post poll disapprove. Almost two-thirds said they think the country is headed into a recession.
In a preview of Bush's speech, Treasury Secretary Paul O'Neill told an audience in Washington on Tuesday, ``The U.S. economy is fundamentally sound, with low inflation and low unemployment.''
O'Neill sought to play down the stock market's big declines, saying they should be viewed against the backdrop of a tripling in stock prices over the past decade.
``Strength of the U.S. economy is not reflected in any one asset price or number but in the flexibility and adaptability of our entire economy to new challenges,'' O'Neill said.
``The recent slowdown occurs against the backdrop of this fundamental soundness and follows on the heels of the extraordinary real growth of recent years,'' O'Neill said, sounding a more upbeat tone than the administration has been taking as it emphasized the economy's weakness in an effort to sell the tax cut.
Bush sent Congress a plan to overhaul public schools shortly after taking office, and was arguing Tuesday that it would boost the nation's productivity in the long run. He has warned that the energy crunch that threatens to cripple California could spread, and he was declaring in his afternoon speech that a broad national energy policy was crucial to safeguarding the nation's economy.
And Bush, who wants to negotiate a new trade agreement covering the Western Hemisphere, was saying free trade was vital to the nation's economic health.
``It's a bringing-together of a series of good reasons for why the country will benefit from his budget and tax and education policies, and it's straight talk on the status of the economy,'' spokesman Ari Fleischer said of the speech. ``It will be a realistic approach, not a Pollyanna-ish approach.''
Administration officials have been promoting the address as a major speech for days. In a departure from recent practice, Bush was delivering it from a TelePrompTer, rather than extemporaneously.
The timing and location of the speech were carefully chosen at a time when Bush's economic plans are making their way through Congress.
The House will soon vote on a budget resolution, which could lead to key test votes in the Senate, Fleischer said.
Bush hoped to find a fertile audience in Michigan, where memories of the last recession remain fresh. ``People in Michigan know well the problems created by rising unemployment, and they want leaders who are realistic and who care enough to tell it straight,'' Fleischer said.
The state is also attractive to Bush because it has two Democratic senators, Carl Levin and Debbie Stabenow.
Bush has sought to win senators over to his plans by campaigning in their states, as he did Monday in Montana, home to Democratic Sen. Max Baucus.