U.S. Vice President Dick Cheney told a business group in Washington Wednesday that, despite a slowdown, the economy is fundamentally strong. Mr. Cheney spoke shortly after government data showed surprising strength in the consumer sector.
The Commerce Department reports that retail sales unexpectedly rose over seven percent in October, the biggest monthly increase since records were started 30 years ago. The surprise rebound from a 2 percent decline in September is attributed to zero percent financing being offered by major auto companies. Auto sales were up 26 percent in October, almost entirely due to the sales incentives of interest-free financing.
Vice president Cheney pointed to predictions that economic activity is likely to decline in the current fourth quarter, and urged Congress to enact a stimulus program that will boost the economy. He said the Bush administration favors tax cuts over increases in government spending.
Mr. Cheney said, "Spending programs come with strings attached. Tax relief gives individuals and businesses the ability to make economic decisions for themselves. Tax relief is pro-jobs. It gives businesses the bottom-line incentives to invest in new equipment to boost productivity and create jobs. Government spending programs are unlikely to boost productivity or wages."
Mr. Cheney endorsed the tax relief stimulus program approved the Republican controlled House. Opposition Democrats, with a majority in the Senate, have approved a stimulus program that relies heavily on government spending. The two legislative chambers are trying to reconcile their differences, but compromise is proving difficult.