President Bush laid out his principles for framing an economic stimulus package today from the Roosevelt room in the White House. “Our economy has a solid foundation, but there are areas of concern,” he said. His speech outlined some broader principles for economic growth legislation, but did not mention specific components beyond tax relief.
The president pointed out that both consumer spending and jobs are growing but at a very slow rate. He also acknowledged that other sectors like housing are declining.
He said that his advisors and other outside experts expect slow growth, but “there is a risk of a downturn.” The White House has been careful not to use the word “recession” often when speaking about the economic situation.
Among his principles Bush noted that the economic stimulus package must be large enough to affect an economy as large as the U.S. He recommended tax relief amounting to about 1 percent of the Gross Domestic Product, or about $145 billion in relief. Bush called for “broad based tax relief” targeted to business and consumer spending. He cautioned against new taxes and spending project, which are being discussed by congressional Democrats.
Tax incentives for businesses must encourage businesses “to make major investments in their enterprises this year,” Bush said.
He also called for “direct and rapid income tax relief” in the form of tax rebates to the American people. He noted that taxpayers can spend this check any way they want, giving examples of paying bills and fueling up. He said that this infusion of cash into the hands of consumers should increase spending.
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