Tax cuts helped relieve the country's first recession in a decade, President Bush told Congress on Friday in his annual economic report.

The president, who said the triple whammy of a slowing economy, terrorist attacks and corporate scandal caused the downturn, promoted his new stimulus program, including $695 billion in tax relief over the next 10 years, as a means to alleviate the sluggish growth rate.

The three-member Council of Advisers wrote the 2003 report, saying that lowering the tax rates, expanding the lowest tax bracket, speeding up marriage tax relief and the child tax credit all contributed to limiting the recession’s length and intensity.

The president wants to make many of those tax breaks permanent and wants to add corporate a dividend tax cut to his list of stimuli.

At a ceremonial swearing in for Treasury Secretary John Snow, Bush said Congress should remember that the tax cuts will mainly go to small business owners, who pay taxes on their company's revenue right out of their individual income tax filings.

"It is important for Congress to remember that most small businesses are sole proprietorships or limited partnerships. And when we cut individual tax rates, we are stimulating capital formation in the small business sector of America," Bush said.

For his part, Snow, who is replacing Paul O'Neill after a shake-up of the president's economic team that happened after former Secretary Paul O'Neill expressed reservations about driving up the deficit, said that he will make getting Congress to pass the new tax cuts was his top priority.

"My first responsibility shall be to deliver your plan to the American people, so that all those who seek work can find it, all families can provide for parents and children and all businesses can invest with confidence," Snow said.

Democrats have attacked Bush's economic policy, pointing out that the country has lost nearly 2 million jobs since Bush moved into the White House and pushed the country from billions in surplus to billions in deficit.

"I believe the president's proposal is reckless and dangerous in a way that we have never seen before," said Sen. Kent Conrad, D-N.D., ranking member of the Senate Budget Committee. 

Conrad said that forecasts of deficits for the next several years -- including $304 billion this year and $307 billion next year -- means that paying for the tax cut will result in a loss of critical social services

"This is a fiscal disaster for this country, and the result can only be massive cuts in benefits in Social Security and Medicare," he said.

The president's Council of Economic Advisers chairman said that in order to keep the economy growing, some deficit will be necessary. Glenn Hubbard said the president's plan to reform the tax code will reward savings in the long run.

"We think there is a recovery under way, but there are a lot of prominent downside risks," Hubbard said, dismissing complaints deficits are too high. This year's deficit is expected to be 2.8 percent of the $10.5 trillion total gross domestic product, a smaller percentage than in previous deficit years.

As news came that January's unemployment rate dropped .3 percent to 5.7 percent, Bush said in his report that he is anxious to see more workers get jobs.

Bush said that despite low inflation, low interest rates and strong productivity gains, "the pace of the expansion has not been satisfactory; there are still too many Americans looking for jobs."

The president said the administration is trying to help Americans who are out of work by extending unemployment payments for those who lost their jobs; improving incentives for investment to create new jobs; and proposing a new program of reemployment accounts to help workers searching for jobs.

By putting more money back in the hands of shareholders, strengthening investor confidence in the market and encouraging more investment, there will be more growth and job creation, Bush said.

"Government does not create wealth, but instead creates the economic environment in which risk-takers and entrepreneurs create jobs," he said.

The Associated Press contributed to this report.