Bush set to launch $670 billion economic recovery
CHICAGO (AFP) - President George W. Bush was to launch an economic stimulus package Tuesday aiming to create millions of new jobs, while fighting off criticism that he is favoring the rich.
Bush's "growth and jobs" plan, to be officially unveiled in a speech in Chicago at about 1800 GMT, would cost 670 billion over 10 years, with 98 billion dollars in tax relief in the next 16 months, the Treasury Department said.
The Treasury confirmed that the plan would seek to eliminate tax on dividends paid to investors. It would also bring forward tax cuts scheduled to take effect in 2004 and 2006 to this year.
"Under the president's proposal to speed up tax relief, 92 million taxpayers would receive, on average, a tax cut of 1,083 dollars in 2003," said a Treasury document on the plan.
Commerce Secretary Donald Evans said the package would create 2.1 million jobs in three years.
"This is a very strong plan," Evans told CNN television, saying it would establish the conditions for the US economy to grow and create jobs "well into the future."
The Treasury said the plan offers tax relief to "everyone who pays taxes -- especially middle-income Americans."
The administration has sought to fend off opposition attacks that Bush is favoring the wealthy and big business.
With the president facing re-election in 2004, he has made reviving the economy a top priority alongside domestic security and has said several times he is worried about the number of unemployed.
In November, there were 8.5 million Americans unemployed, six percent of the working population, according to the government. But huge stock market losses are also a concern for Americans.
Democrats on Monday unveiled their own 136-billion-dollar shot in the arm for the shaky economy targeted at consumer spending.
Bush in response insisted Monday that his plan would reach "working citizens" and not just the wealthy.
Evans said there was a fundamental difference between the rival Democrat and government plans.
"Theirs (the Democrats) is a spending plan, and the president's plan is a tax-cut plan. Theirs is a temporary plan; the president's plan is a more permanent plan. It allows families to plan for the future," said Evans.
"The president was handed a recession when he entered into office. He moved swiftly on that and led on a tax cut that was the best-timed tax cut in the history of this country. It meant that the recession was shallower than it would have been, not as long as it might have been," Evans said.
A typical family of four with two earners making 39,000 dollars a year will receive a total of 1,100 in tax relief, according to administration officials.
"The president's plan is a plan that helps all Americans. It helps middle-income Americans. It helps the economy get going and growing again," White House spokesman Ari Fleischer said Monday.
The Treasury said the plan offers relief to "everyone who invests in the stock market and receives dividend income -- especially seniors."
Administration officials said the plan would eliminate "double taxation" of dividends, because profits already taxed at the corporate level. But some critics of the plan dispute this interpretation, saying some corporations pay little or no taxes.
According to the White House, 13 million elderly taxpayers -- a key segment of the electorate in any presidential race -- would get 1,384 dollars.
Other elements of the Bush plan include quicker tax writeoffs for business equipment, a move aimed at helping small businesses, and extended unemployment benefits.
For the unemployed, Bush is proposing a new "flexible personal re-employment account" that would provide a bonus to jobless individuals who find work quickly.