Bush's Big Plan

By: Associated Press
By: Associated Press

President Bush asked Congress on Tuesday to "push the economy forward" with a $674 billion plan to abolish federal taxes on stock dividends, speed up promised income tax cuts and send rebate checks to 34 million low- and middle-income parents.

Democrats said the lion's share of the package favors the rich, a claim the White House did not dispute.

"This growth and jobs package is essential in the short run," Bush said in an address to the Economic Club of Chicago. "It's an immediate boost to the economy. And these proposals will help stimulate investment and put more people back to work."

The 10-year package, all but $4 billion of it for cutting taxes, goes to Congress as the federal government grapples with rising budget deficits.

"He has put forward an irresponsible, ineffective, ideologically driven wish list," said Sen. Joseph Lieberman, D-Conn., who is likely to seek the Democratic presidential nomination.

The president and his allies counter that the package will spur consumer and business spending, expanding the economy and helping the government's budget figures.

This is Bush's second attempt to jump-start the economy; the first stimulus package came after the Sept. 11 attacks. He said the economy is sound, but a six percent unemployment rate is too high.

By far the most expensive item is eliminating taxes on stock dividends paid to shareholders. Bush is counting on wide appeal from the growing number of Americans who invest in the stock market.

Bush also wants to make rate reductions from the 2001 tax law effective this year and retroactive to Jan. 1. Currently, those cuts don't take place until 2004 and 2006.

Promising tax relief for the middle class, Bush proposed to speed up provisions in the 2001 law that increased child tax credits, reduced the tax penalty paid by some married couples and expanded the creation of a 10 percent tax bracket.

In addition to supporting an extension in unemployment benefits, Bush asked Congress to send $4 billion to states and create "re-employment accounts." People who have exhausted their unemployment benefits or are likely to do so can receive up to $3,000 to pay the expenses incurred in finding a job.

The plan offers few direct business breaks, though small companies would be able to write off more equipment expenses.


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