WASHINGTON -- President Bush and his top economic adviser urged Congress on Wednesday to approve a stimulus plan of between $60 billion and $75 billion to avert a steep recession triggered in part by last month's terrorist attacks. "I know people are hurting," Bush said.
Proposing tax cuts for individuals and businesses, Bush told business leaders in New York that Washington must "provide a kick start to give people reason to be confident, and we will do that."
Bush said the administration is considering tax rebates for people or accelerating the tax cuts approved earlier this year. For businesses, corporate tax cuts and investment tax credits are among the options. Laid-off workers need extra relief, he said, because the attacks "shocked our economy just like it shocked the conscience of our nation."
Bush made the remarks shortly after Treasury Secretary Paul O'Neill told the Senate Finance Committee he expects negative real growth in the current quarter but said similar poor performance could be avoided in the fourth quarter if consumer confidence quickly rebounds.
"The depth of this contraction, as well as the pace at which the economy returns to a healthy rate of growth, will depend in large part on how fast consumers regain their confidence and on our success in incorporating new protections against terrorist acts without material reductions in productivity," O'Neill said.
O'Neill said the president had set the range for the additional economic stimulus at between $60 billion and $75 billion. Congress has already approved a $40 billion emergency spending plan and $15 billion airline aid package.
Administration officials said Bush wants quick agreement on the size of the stimulus package before the White House and congressional leaders delve into the details and comments from both Republicans and Democrats in Congress indicated that a consensus was forming.
Senate Majority Leader Tom Daschle, D-S.D. suggested roughly $50 billion. "Senate Democrats feel that is an appropriate size," he said. "This is deficit spending once again and its very disconcerting to many of us. But I don't know that there's an alternative. We are in an economic and military and security emergency."
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he favors another round of tax rebates to help the roughly 30 million Americans whose wages are so low they did not qualify for the checks mailed out earlier in the year. Virtually all wage-earners pay Social Security payroll taxes and the tax relief could be based on those levies.
Baucus said he also supports an extension in unemployment benefits and tax relief to encourage businesses to make new investments in plant and equipment.
O'Neill said the administration is considering all those proposals as well. He said that it would probably be a good idea to make any business tax relief retroactive to Sept. 11 so that businesses did not halt purchases of big-ticket items waiting for the legislation to be enacted.
O'Neill said the administration was also considering speeding up a key provision of the massive $1.35 trillion 10-year tax cut passed earlier year.
He said the reduction in individual tax rates scheduled to go into effect in 2004 could be moved forward to next year, boosting consumer purchasing power and quickly stimulating the economy.