US President George W. Bush's advisers presented Congress on Friday with an upbeat assessment of US economic prospects, predicting faster growth would help offset nearly half the cost of sweeping tax cuts over the next five years while reducing record deficits.
"The economy is not growing fast enough," Bush said at a ceremonial swearing-in for Treasury Secretary John Snow.
"We believe the best way to deal with our deficits is to encourage economic growth and to encourage spending discipline in Washington."
Bush's nearly US$700 billion tax cut plan, which calls for eliminating taxes on corporate dividends paid by shareholders, has run into stiff opposition from Democrats and some moderate Republicans who say it would do little to revive the economy while pushing budget deficits to record levels.
"The president is going to fight for the plans that he submitted to the Hill," White House spokesman Ari Fleischer told a news conference.
To that end, Fleischer said Treasury Secretary John Snow, Commerce Secretary Don Evans and White House economic adviser Stephen Friedman would meet with Republican lawmakers.
In addition, Fleischer said 15 to 20 members of Bush's Cabinet and other senior administration officials would fan out over the next two weeks to more than 20 cities to tout the package, which would accelerate income tax rate cuts scheduled for 2004 and 2006.
The 400-page "Economic Report of the President," released on Friday, makes the case for conservative, free market policies, including sweeping tax reform.
It also prods China to meet its trade obligations, warning that failure to do so could prompt other members of the WTO to retaliate.
White House officials played down the impact of Bush's tax cuts on government debt and interest rates.
Bush economic adviser Glenn Hubbard estimated that the Treasury would recoup 40 percent of the cost over the next five years through increased economic growth.
But he warned of "very prominent downside risks" to recovery, chief among them slow growth in business investment. He played down the impact of a possible war with Iraq on business sentiment, saying it was one of several factors.
"The economy is recovering" from the recession and the Sept. 11 attacks, Bush said in a statement accompanying the report.
"Despite these challenges, the economy's underlying fundamentals remain solid -- including low inflation, low interest rates, and strong productivity gains. Yet the pace of the expansion has not been satisfactory," he added.
Bush's economic report forecasts rosy days for the now-floundering economy.
Growth is forecast to pick up to 3.6 percent in 2004, followed by 3.4 percent in 2005, according to the report, which is prepared by the White House Council of Economic Advisers.
Hubbard, who chairs the council, said he expected the economy to grow even faster, barring unforeseen setbacks.
The economic report also plays down the impact of the tax cuts on interest rates, estimating they would rise by about 3 basis points for every US$200 billion in additional debt.
"Concerns that higher interest rates would choke off the stimulative effects of recent tax reductions seem unwarranted," the report said.
The report did not mention a possible war with Iraq, which many analysts cite as a risk to the economy because of its potential to cause an oil price spike and sap consumer confidence.
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