President George W. Bush seems to know only one song when it comes to the economy — cut taxes and all will be well.
His rather vague speech today centered on rebates without saying who would get them or how big they would be. But he made it clear that tax cuts were his solution to the nation’s growing economic woes:
“This growth package must be built on broad-based tax relief that will directly affect economic growth, and not the kind of spending projects that would have little immediate impact on our economy.” He said it should include tax incentives for American businesses, including small businesses, to encourage major investments in their enterprises this year, and “direct and rapid income tax relief for the American people.”
Given his record on tax cuts — selling them (falsely) as huge savings to middle-class voters while making sure his cronies well up the income ladder benefited to the greatest degree — one shouldn’t expect too much. Plus, there is some question as to how effective these kinds of rebates tend to be.
John Sweeney, president of the AFL-CIO, is critical — and makes some strong points:
In a letter to Reid and Pelosi today, AFL-CIO President John J. Sweeney said Bush’s proposals appear to be “too heavily weighted towards tax cuts over much-needed spending, do not address crucial problems facing working families, and do not target tax benefits to those families who need them most and will spend them fastest.”
Unions also are worried that Bush’s proposed tax relief for businesses “would not be sufficiently timely and, because of the linkages between federal and state tax codes, could trigger economically depressing budget cuts and tax increases by state governments,” Sweeney said.
Citing lower property and sales tax revenues in many states, the letter urged Congress to “provide at least $30 billion in aid to the states in the form of revenue-sharing grants and increases in the Medicaid match.” It also called for $40 billion to accelerate “ready-to-go construction projects” such as repairs to schools and bridges.
In addition, Sweeney said, Congress should address “the most fundamental underlying causes of our current economic weakness,” notably “the stagnation of ordinary Americans’ incomes” and a lack of “effective regulation of the mortgage and financial services industries.”
Basically, the president is hoping that handing a little cash to most of us and a lot of cash to a handful of us will make the economic uncertainty hanging over the nation go away. Exactly how much did he say he wanted for the Brooklyn Bridge?
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Hank Kalet 