The Bush administration says the long-term outlook for the U.S. economy is bright, and steps are being taken to address short-term weakness. VOA's Michael Bowman reports from Washington, some candidates in the presidential election campaign believe a stimulus package crafted by the White House and congressional leaders is either misguided or fails to address the country's most pressing needs.
Treasury Secretary Henry Paulson has been one of Washington's busiest people over the last week. As President Bush's point-man for forging an economic stimulus package, Paulson held lengthy sessions with Congressional leaders, hammering out a deal that features rebate checks for working Americans, as well as business investment incentives.
Paulson says Washington must act, now that economic growth has slowed.
"The economy has slowed down rather markedly," said Henry Paulson. "I think we are going to keep growing, albeit much more slowly, and the cost of doing nothing is too great. That is why we are moving quickly with this bipartisan stimulus package."
The treasury secretary was speaking on CNN's Late Edition program.
Paulson suggested that, in addition to providing an actual economic boost, the federal stimulus package will have an important psychological effect on American consumers and businessmen.
"Fear is the enemy here, and there is no reason to be fearful," he said. "We have a U.S. economy that is structurally sound. The long term fundamentals are healthy. Growth is slowed down. But there are positives here, and, again, we are moving to take action."
The stimulus package, with an estimated price tag of $150 billion, must be approved by both houses of Congress before President Bush can sign it into law. Some Senate Democrats have indicated they will attempt to broaden the bill to boost government benefits for the unemployed, as well as those who rely on federal assistance to buy food. President Bush has argued against changes to the package that could delay its implementation.
The plan comes during America's hectic primary presidential campaign season, with candidates of both parties laying out their economic plans for the future. Among Republican contenders, former Arkansas Governor Mike Huckabee is questioning the wisdom of incurring higher deficit spending to promote consumerism, noting that China funds much of the U.S. debt.
"What we are really doing is borrowing about $150 billion from the Chinese," said Mike Huckabee. "Then, we are going to give rebates to taxpayers, and that is great. But what will most of them do with it? They are going to buy things that were imported from China."
Speaking on Late Edition, Huckabee said a better option would be to boost spending to improve America's infrastructure and transportation system. Asked about the Huckabee comments, Paulson said infrastructure spending is vital, but such projects would not provide the immediate, short-term boost that the U.S. economy needs at present.
On the Democratic side, there has been no overt opposition to the stimulus package, but most presidential candidates are urging far-reaching economic reform. Fresh from his victory in Saturday's South Carolina primary, Illinois Senator Barack Obama spoke on ABC's This Week program:
"What we have not seen are ordinary people's incomes and wages going up significantly," said Barack Obama. "In fact, they have flatlined [stagnated] at the same time that their costs have skyrocketed. Let's get middle class tax relief, a middle class tax cut for ordinary working families. Let's close corporate tax loopholes. Let's shift some of the rewards of the economy to working and middle class families."
Congressional leaders say they hope to pass the stimulus package in coming weeks. If successful, Americans could conceivably begin receiving tax rebate checks at some point in March.
President Bush is expected to devote a significant portion of Monday's State of the Union address to economic themes.