Vice President Dick Cheney struck back Friday at critics of President Bush's US$674 billion economic plan, saying the proposal was not geared to the rich, would not hurt state budgets and would not increase the federal deficit over time.
In his first public comments about the plan, which the administration is preparing to sell aggressively in coming weeks, the vice president also said that while eliminating the deficit was an important goal, Americans needed to put the government's red ink "in perspective."
The deficit of US$159 billion in the fiscal year that ended Sept. 30 was only 1.5 percent of the national economy, he noted.
Ultimately, he asserted, Bush's big new plan for tax cuts will generate economic growth that will reduce deficits over the next decade.
"Clearly, acting now to promote growth and to prevent even larger deficits in the future is the economic sensible thing to do," Cheney said in a speech to the US Chamber of Commerce.
The vice president's remarks reflected the tax-cutting, supply-side beliefs of the president's conservative supporters and placed him in direct opposition to a central economic philosophy of the Clinton administration: to put deficit reduction first as a way to bring down interest rates and so create an economic boom.
Cheney spoke at the chamber's headquarters, on the edge of Lafayette Park. It is a short walk from the White House, where advisers were developing a major public relations strategy to convince Americans of the merits of the president's plan.
Players on Bush's economic team are soon to be dispatched around the country. Commerce Secretary Donald L. Evans will push the plan at a factory in Paducah, Kentucky, on Monday, for example, and Mitchell E. Daniels Jr., the White House budget director, will speak to the Chamber of Commerce on Wednesday.
But Cheney, who rarely speaks in a big Washington forum, is the most senior official aside from the president to push the plan, and his speech suggests the high priority the White House is placing on what it calls its "jobs and growth" package.
In the speech, Cheney disputed the criticism that the proposal's central provision, elimination of the tax that shareholders pay on dividends, was focused on benefiting the rich.
"The fact is that 54 million Americans own stocks that pay dividends," Cheney said, his remarks delivered in even, measured tones that were not interrupted once for applause. "Moreover, 45 percent of all dividend recipients make under US$50,000 a year."
Another criticism of the plan has been that eliminating the tax on dividends would cost the states revenue, because their income tax laws are generally tied to federal law. But the vice president estimated that increased economic growth created by the president's proposal would raise annual state revenue by some US$6 billion, more than offsetting the amount lost to the dividend provision.
The president's program, Cheney said, will encourage consumer spending, lift confidence in the financial markets and help the unemployed.
On Friday, Tom Daschle, the Senate Democratic leader, criticized Cheney's speech as an exploitation of America's economic problems to justify more tax breaks for the rich.
"The administration's plan won't boost the economy," Daschle said in a statement issued by his office. "It won't make our homeland more secure. It won't make health care more available or more affordable. It won't expand educational opportunity for the young, or strengthen Social Security for the elderly. Instead, by putting us deeper into deficit and debt, it makes all of these things harder to achieve."
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