- The Washington Times - Friday, March 16, 2001

Top congressional Democrats took their opposition to the administration's tax-cut plan to a new level yesterday, blaming President Bush for scaring consumers and investors so badly that the economy has soured and thousands have lost their jobs.
"The Bush administration has been talking down the economy now for some time," said Senate Minority Leader Tom Daschle at a Capitol Hill news conference with House Minority Leader Richard A. Gephardt.
"They're doing it for the short-term political gain of passing a tax cut we can't afford and don't need. And we're beginning to see the results in the [stock] market," Mr. Daschle said.
The new administration, which has been trying to foster a civil tone, reacted strongly.
"To suggest that the president's words have caused any of these actions … is as wrong as wrong can be," said White House spokesman Ari Fleischer. "No one should make a partisan issue of when this slowdown began."
Senate Majority Leader Trent Lott said the Democratic leaders are "desperate" because the public isn't buying their arguments against Mr. Bush's proposed $1.6 trillion tax-cut package.
"They'll try anything in desperation to try to keep the people from getting tax relief," Mr. Lott told The Washington Times. "You ain't heard the last of these two and their whinings yet."
Mr. Bush has been pressing for tax cuts by telling the public that "a warning light is flashing on the dashboard of our economy." Vice President Richard B. Cheney said Dec. 3 that the nation "may be on the front edge of a recession."
Democrats have accused Mr. Bush of favoring the wealthy with his tax-relief plan, even mocking his proposal by displaying a luxury car and a muffler at a news conference on Capitol Hill. But until yesterday, they had not waged an orchestrated effort to blame the new president for the faltering economy or layoffs.
Mr. Gephardt accused Mr. Bush and Mr. Cheney of suggesting a recession lies ahead "to justify what looks like it's going to be a $3 trillion tax cut."
"I think that kind of economic leadership is irresponsible, I think it's mismanagement of our economy," said Mr. Gephardt, Missouri Democrat.
But Mr. Gephardt, in an interview Jan. 3 on NBC's "Today" show, cited a possible recession as reason he would support larger cuts.
"It may be that [the tax cut] has to get bigger because the recession is, is looming, and we've got economic worries out there," he told host Matt Lauer.
Gephardt spokeswoman Sue Harvey said yesterday that Mr. Gephardt uttered the "R-word," as Democrats are now calling it, one month after Mr. Cheney raised the specter of a recession.
Asked if Mr. Gephardt had been irresponsible to mention a recession in January, she replied, "He didn't originate it."
Mr. Daschle opened the Democrats' news conference at the Capitol yesterday by highlighting what he said was an "appropriate" remark by Kenneth Goldstein, an economist with the Conference Board in New York.
"What happened is that a few politicians opened their mouths and started to use the 'R-word.' " Mr. Goldstein said. "And then newspapers started to run big headlines about layoffs."
Mr. Daschle said, "I think that is, in essence, what happened."
As he talked about perception becoming reality, Mr. Daschle got a boost from an aide who placed two phone books on his seat to make him appear as tall on television as Mr. Gephardt, seated next to him.
Mr. Fleischer said signs of an economic slowdown began to emerge as far back as one year ago. He said estimates of the nation's gross domestic product were revised downward last summer.
"The decline in the Nasdaq began in March of 2000," Mr. Fleischer said. "President Bush had just barely emerged from the primaries in March of 2000. The economic slowdown also can be traced back factually and accurately in time."
He also said the president "believes that it is the job of a leader to speak accurately and not to hide or withhold information from the American people."
Some economists yesterday scoffed at the notion that a politician's public comments could cause the economy to swoon.
Henry Aaron, senior fellow in economics at the Brookings Institute, said Mr. Bush's warnings about the need for tax cuts to boost the economy were "not likely to have been a major factor in the fluctuation of stock prices or any downturn we've been experiencing."
And Mark Wilson, a research fellow on tax policy at the conservative Heritage Foundation, called the Democrats' argument "pathetic."
"They're desperately grabbing at anything to try to tar the president with," Mr. Wilson said.
Mr. Lott said of the Democrats, "The arguments they've used [against the Bush tax cut] so far have not worked, so they'll try this one."
"Well before President Bush was declared the winner, there were all kinds of signs that the high-tech market was slipping, and that the timber industry in America was being assaulted by Canadian timber, and the steel industry was suffering and interest rates were too high," Mr. Lott said. "So it's going to be pretty hard to blame this Clinton slide on the Bush administration, when he hasn't even been in office two months yet."
Mr. Fleischer said the president is simply trying to give the public some straight talk on the economy, and that Mr. Bush believes the long-term outlook is good.
"He think it's terribly important that people in both parties send the signal to the public that we understand the difficulties that people are going through with the current weakness in the economy and that it's very important for people to hear that message from the government," Mr. Fleischer said.
"He hopes that nobody would turn a blind eye to the economic difficulties in this nation at a time when people need to know straight facts from their government leaders. The president believes very deeply that there would be a real-world and psychological impact of a negative nature if people in government did not share accurate information with the American people."


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