- The Washington Times - Friday, October 11, 2002

Democratic leaders yesterday renewed their election attacks on the administration, calling the slumping economy a "mess" and demanding that President Bush fire his economic advisers.
But Republicans said the economic recovery, although "bumpy," was heading upward and that Democrats had no plan to stimulate growth and jobs.
With a new poll finding that "the economy has risen to become the predominant concern in the minds of voters as they consider their congressional vote," Democrats sought to break through the noisy national debate about going to war in Iraq and refocus the election on the economy, which they believe is their strongest campaign issue.
But with about 3 weeks to go before the Nov. 5 elections, neither party had any major new end-of-session legislative proposals on the table that would deal with the overall economy's persistent anemia.
Democratic leaders again called for an economic summit with the White House to revisit Mr. Bush's budget and reopen the across-the-board income-tax cuts passed last year. However, they have refused to call for the repeal of the tax cuts, despite demands from some liberal Democrats.
Instead, the Democrats have proposed new federal spending initiatives, including prescription-drug coverage, extended unemployment benefits, minimum-wage increases and increased federal aid to education. The cost: $13 billion more in this fiscal year, which would push nondefense spending up by $200 billion over 10 years, according to the Office of Management and Budget.
Mr. Bush and the Republicans are sticking with their sweeping tax-cut plan, holding down federal spending increases outside defense and the war against terrorism, moving full speed ahead on new free-trade deals and pushing bills being blocked by Democrats to boost energy resources and provide the building industry with affordable terrorism insurance.
Still, Republican officials say they are worried about how a narrowly divided electorate will vote on Nov. 5 if the economy and the stock market continue to show signs of weakness and the Republican Party is perceived as not doing enough to get the economy growing at a faster rate.
Moving to blunt the Democrats' stepped-up attacks on the economy, Treasury Secretary Paul H. O'Neill said yesterday that the White House was closely monitoring the daily economic statistics and may consider further tax cuts in another economic-stimulus package to spur growth if that becomes necessary.
Mr. O'Neill said Mr. Bush "hasn't closed the door" to further tax cuts, noting, however, that although the economy remains on "a bumpy road," the "direction is up." The blue-chip consensus of economic forecasters is that the economy is growing by about 3 percent thus far this year and may move slightly higher in the fourth quarter.
Amid growing investor anger about a declining stock market that has wiped out trillions of dollars in retirement savings, Republicans hastily pushed two new investor tax-cut bills through the House Ways and Means Committee on Tuesday. Republicans had hoped to bring them up for a vote in the House today to send a message of concern to the nation's 85 million investors. It was not clear as of last night when the vote would take place.
The bills would substantially raise the amount of stock losses that investors could deduct from their taxes, give older investors an added five years before they must begin withdrawing income from their IRA plans and raise the contribution limits to 401(k) and IRA plans next year, instead of in 2004 and 2006 as originally enacted.
Mr. O'Neill also has said the administration is working on a major tax simplification and reform plan for next year. And the White House says it intends to press ahead with its Social Security reform plan in 2003 to let workers invest part of their payroll taxes in personal retirement plans that would give the stock market and the economy a major infusion of new investment capital.
Earlier yesterday, Senate Majority Leader Tom Daschle, South Dakota Democrat, called on Mr. Bush to change his team of advisers, including White House economic adviser Lawrence Lindsey, who was the chief architect of the president's tax-cut policies.
"I don't think there's an economic adviser in the administration that can give him the right answers for how to confront the mess we're in today," Mr. Daschle said.
"I talked to people yesterday in the high-tech industries. They think they're in a recession and have been in a recession and see no way out," House Minority Leader Richard A. Gephardt, Missouri Democrat, told a group of reporters. "This is an administration and a Republican majority that is tone deaf."
The two leaders said they would hold an economic summit today to highlight the economy's problems and their proposals to stimulate growth and job creation.
Republicans dismissed the Democrats' call for an economic conference with the White House as a meaningless political stunt that would do nothing for the economy.
"A summit is not an economic plan. It's an admission of failure. Democrats do not have a single idea other than raising taxes, so they want to turn to a summit to give them cover to raise taxes," said Greg Crist, a spokesman for House Majority Leader Dick Armey, Texas Republican.
The economy has emerged as the top issue in the final weeks of the elections, "but there is no evidence that it is working to the advantage of either party," according to polling results released yesterday by the Pew Research Center.
"Fully 55 percent of voters cited a range of economic issues, including jobs and unemployment and the state of the budget, when asked what issues they want to hear candidates in their state and district talk about," the Pew survey found.
"This represents a dramatic increase from June, when just 20 percent cited economic issues as a priority," Pew said.


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