Posted on 02/11/2003 4:19:05 PM PST by Hostage
WASHINGTON (Dow Jones)--Treasury Secretary John Snow on Tuesday vowed a "full-court press" for President George W. Bush's new tax cut plan. He also predicted U.S. shareholders will become strong allies for the $695 billion tax cut once they understand its benefits.
"We build a bigger and bigger base of support for this proposal as it gets understood and shareholders learn what it means for them," Snow told reporters in his first press conference as Treasury secretary.
Snow said the U.S. needs fiscal restraint to control deficits, but said he believes the forecast deficits are manageable in the context of the overall economy.
"You can get balanced budgets the wrong way at too high a cost to the economy," Snow said. "Balanced budgets shouldn't be nirvana, because you can achieve balanced budgets in a way that is very suboptimal for the economy."
Snow remained upbeat about the Bush tax plan, which calls for eliminating the double-taxation on most corporate dividends, despite a cool reception on Capitol Hill. Some moderate Republicans, such as Rep. Nancy Johnson, R-Conn., say the dividend tax cut isn't a priority to stimulate the economy. Snow was undeterred.
"This is an idea that we've just begun to talk about," he said.
Snow's comments came after Federal Reserve Board Chairman Alan Greenspan told Congress he isn't convinced economic "stimulus is a desirable policy at this point" and also urged Congress to control budget deficits. Bush's proposed fiscal year 2004 budget is forecast to post a record $307 billion deficit; Democrats contend the tax cut plan will exacerbate the red ink.
Senate Minority Leader Tom Daschle, D-S.D., said Greenspan's comments were "the kiss of death" for Bush's tax plan.
Snow said the tax proposal is aimed to boost economic growth over the long-term by eliminating a second layer of taxation on capital.
"Why would you want to double tax the most important source of economic growth and prosperity - capital?" he asked.
Snow, dressed in a long-sleeve blue shirt and matching tie with a can of diet soda nearby, spoke to reporters after returning from a trip to Wall Street where he toured a brokerage firm and met with corporate executives.
"I think the economy is in a recovery but a recovery that can use the sort of boost that this package will give it," he said.
-By Rob Wells, Dow Jones Newswires; 202-862-9272; Rob.Wells@dowjones.com
We already half through February and the Administration has just "begun to talk" about ideas. Republicans have full control and yet they appear to be posturing and dragging their feet on so many issues. Where is Tom Delay?
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