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Bush Administration Seeks New Economic Stimulus Package
The Bush administration urged Wednesday U.S. Congress to approve as soon as possible a new economic stimulus package of 60 to 75 billion U.S. dollars aimed at restoring consumer demand, supporting business investment and helping laid-off workers.
Testifying before the Senate Finance Committee, Treasury Secretary Paul O'Neill said that it now seems certain that the U.S. economy experienced negative real growth in the third quarter of this year as a result of the September 11 terror attacks.
"Recognizing this, the president has instructed me to work with the appropriate members of Congress to formulate a package of actions with a fiscal year 2002 impact of about 60 to 75 billion dollars," O'Neill said.
Congress and President George Bush have approved measures that include 40 billion dollars in emergency spending and about 15 billion dollars of aid and loan guarantees for airlines that have seen a steep drop-off in business following the attacks.
Bush, who made Wednesday his second visit to New York since the attacks and met with business leaders, urged Congress to move fast on the package.
He said "the two most effective ways" to boost consumer spending would be to provide them tax rebates and accelerate personal income tax rate cuts already in the pipeline. He said for business, investment tax credits and faster write-offs for purchases of computers and high-tech equipment might help.
Many analysts believe the U.S. economy, already weak before the terror attacks, has now tipped into recession.
"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 possible terrorist acts without material reductions in productivity," O' Neill said.
"We're confident we can come together to create a fiscally responsible stimulus package that will restore confidence and prosperity in our economy," he said.
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