A Senior Bush administration economic official Sunday urged Congress to approve a fiscal stimulus package to restore growth to an economy hard hit by the loss of confidence that followed the September 11 terrorist attacks.
White House economic advisor Lawrence Lindsey says fiscal stimulus is needed to get the economy back on track. He told Fox News Sunday that a combination of tax cuts and emergency spending could make the difference in avoiding a sustained downturn. Already approved by the House, a stimulus package has become bogged down in the Senate with Democrats favoring more spending and Republicans more tax cuts.
On CNN's Late Edition, Treasury Secretary Paul O'Neill said despite shrinkage in the third quarter it is premature to say the economy is in recession and that output will be down in the current three month period. "I don't think we know yet," he said. "We'll let the data speak for itself. But there is encouraging news over the weekend. I saw some data earlier this morning that retails were up four percent better this year over last, for Friday, with Walmart, one of the biggest chains saying it had 1.25 billion dollars worth of sales, a record for them. I think our economy is coming back. We need to make sure it keeps coming back."
Mr. O'Neill also appealed for congressional action on a stimulus plan. He said a stimulus package is needed even though the economy has now recovered most of the losses incurred after September 11th. "But we need to do better," he added. "We should be growing at three, three and a half percent real growth as we go forward. And 75-Billion dollars of stimulus, we think, would help to insure that we're going to get there." Mr. O'Neill said he expects economic growth to improve substantially in 2002.