President Bush yesterday suggested that Senate Majority Leader Tom Daschle never had any intention of passing an economic-stimulus package but that he does want to raise taxes, which would only deepen the recession.
During a meeting with Federal Reserve Chairman Alan Greenspan and White House economic advisers, Mr. Bush complained about Mr. Daschle blocking an economic-stimulus package just before Christmas.
“We had a bill come out of the House of Representatives, and there was a bill that could’ve passed the United States Senate,” the president said in the Cabinet Room of the White House. “There was enough votes, had the bill been brought on the floor, that would’ve passed.
“Except along the way, there was an attitude that said, ‘Well,
maybe we don’t need a package,’” Mr. Bush added. “I happen to believe we do need one, and there was a good one that could’ve passed.”
After blocking a floor vote on the stimulus package, which included new tax relief, Mr. Daschle blamed the recession, which began in March, on a Bush tax cut that passed in May. Although the South Dakota Democrat never explicitly called for repealing the tax cut, the White House was accusing him of trying to raise taxes.
“That would be a disaster to raise taxes in the midst of a recession,” Mr. Bush said yesterday. “Most economists agree with that point of view, if they’re fair about it.”
Mr. Daschle, whose office did not return a phone call, was defended by House Minority Leader Richard A. Gephardt.
“I have not heard one Democrat say he or she wants to raise taxes,” the Missouri Democrat said in a prepared statement. “Nonetheless, some in the Republican Party are insisting that Senator Daschle and Democrats want to raise taxes.”
The president’s August tax cut was designed to phase in during the course of a decade. Some Democrats want to repeal components that have not yet taken effect, while others, including Mr. Daschle, prefer replacing certain components with tax cuts less friendly to corporations.
“By reducing taxes at a time when our economy was slowing down, the Congress, working with the administration, did the absolutely right thing to provide a stimulus,” Mr. Bush said.
“And to change in the midst of the phasing in of the tax relief plan would send the absolute wrong signal to the economy. It would say we weren’t real about it; we weren’t serious about tax relief.”
He added: “Tax relief is a part of the economic recovery plan.”
Mr. Bush announced that he will include the stimulus package in the budget he submits to Congress next month. He urged Congress to reconsider the measure when it returns from vacation later this month.
“I hope that when Congress comes back they will have listened to their constituents and that Congress will realize that America, like me, is tired of partisan bickering,” he said. “We ought to unify around some sensible policy and not try to play politics with tax relief or, for that matter, economic-stimulus packages.”
The president said deficit spending has returned after several years of budget surpluses.
“I said to the American people that this nation might have to run deficits in time of war, in times of a national emergency or in times of a recession,” he said. “And we’re still at all three.”
He added: “We may not balance the budget for this year.”
Mr. Greenspan, whose economic pronouncements can have major effects on stock markets, had no public comment during the White House event. The president cut off a reporter who tried to ask a question of the Federal Reserve chairman.
“He can have a press conference elsewhere, but one of the things we’re not going to do is drag the chairman into a press conference. Otherwise, he won’t come back to the White House,” Mr. Bush said.
The president yesterday appointed former Secret Service Director John Magaw as undersecretary of transportation security, using his power to make personnel appointments when Congress is out of session. Mr. Magaw’s nomination had been stalled in the Senate.
Also yesterday, Mr. Bush renewed his defense of a Secret Service agent of Arab ancestry who was barred from carrying a gun on a commercial flight from Baltimore-Washington International Airport to Texas, where he was assigned to guard the president. The agent now is suing American Airlines for discrimination.
“If he was mistreated because of his ethnicity, I’m going to be plenty hot that means angry,” Mr. Bush said. “And I know the man, I am most appreciative of his service to me and my wife. He is an honorable fellow.”
He added: “I would be surprised if he was hostile. But I wasn’t there, so it’s hard for me to comment on something which I did not see.”
American Airlines chief executive Don Carty insisted that the agent was hostile.
“This agent was not behaving appropriately, and our captain simply was not going to let an angry man with a gun on his airplane,” Mr. Carty told American employees in a tape-recorded message.
“I back that completely, and I will back any employee who makes the same kind of decision for safety and security. Period. End of story.”