Bush: Permanent Tax Cuts Will Help Economy

WASHINGTON – President Bush on Friday pushed Congress to make his tax cuts permanent in order to further stimulate the nation's economy, even as critics questioned the strength of new economic indicators.

"By cutting taxes on income, we help create jobs," Bush said in an address before the Chicago Board of Trade, declaring that "the American economy heads into 2006 with a full head of steam."

The tax cuts have helped spread wealth in the country, boosted investor's confidence and increased worker productivity, Bush said, but the country is in peril of losing that boost.

"There are a lot of people in Washington who don't believe in tax cuts. ... When you hear somebody say, 'Let's don't make the tax cuts permanent,' what they're telling the American worker and the American family is we're going to raise taxes on you," Bush said.

"To keep this economy going, to keep the entrepreneurial spirit alive, to make sure that the United States of America is the most productive nation in the world, the United States Congress must make the tax cuts permanent."

Bush and his Cabinet began an economic offensive Friday, touting lower jobless numbers and other indicators. Vice President Dick Cheney toured a Harley-Davidson motorcycle plant in Kansas City, Mo., and more than a dozen other officials were set to give speeches around the country in pushing efforts to better prepare Americans for the changing marketplace.

In Chicago, Bush also called for expanding health savings accounts, continued vigilance against so-called "junk lawsuits," and education reforms for both the young and those already working. He also advocated the expansion of global free trade.

Bush said he believed gaps in education between advantaged and disadvantaged were decreasing because of new accountability standards he pushed for in his No Child Left Behind Act, and called on educators not to remove those reforms as a result of the "bigotry of low expectations."

Although new labor numbers released Friday didn't meet forecasts, administration officials are saying that the president isn't getting the credit he deserves on the economy. The Labor Department on Friday reported a gain of 108,000 jobs in December, and the unemployment rate fell to 4.9 percent. But that job growth slowed to about half of what it was in November due to a big hiring spurt when about 305,000 jobs were created.

"These are strong numbers," said White House spokesman Trent Duffy. He said the November and December figures signaled the economy was adding more than 200,000 jobs a month. "It's very healthy job creation."

Economists were expecting numbers to double what the Labor Department reported, and organized labor says the numbers are misleading. They say the economy lost two-thirds of the 4.5 million jobs created since May 2003, and the unemployment rate doesn't show the number of people who are working part-time or have given up looking for work.

Democrats are specifically criticizing high prescription drug costs and confusion about the new Medicare prescription drug plan, high heating bills, displaced workers in the Gulf Coast and rising federal deficits.

Senate Minority Leader Harry Reid of Nevada said he was skeptical of the new economic data.

"Job creation remains anemic, millions of Americans still struggle to find a job and wages continue to fall farther and farther behind," Reid said. "We need to create an economy that works for all Americans."

Sen. Charles Schumer of New York said rising the rising cost of health care, college tuition and energy are squeezing the middle class.

"For the administration to be out there saying things are great shows just how out of touch they are with the average American," Schumer said.

But Rep. David Dreier, R-Calif., praising the new economic data.

"This good economic news can easily be traced back to May 2003, when investment-oriented tax relief was signed into law. ... Our agenda for 2006 should be clear: Keep in place the tax relief that got this economy rolling again, and build on its success," Dreier said in a statement.

Labor Secretary Elaine Chao said the jobless numbers are a strong indicator of an improving economy, especially compared with European countries that see their unemployment rates around 10 percent and above.

The problem, she said, is that domestic jobs, while available, are increasingly technical.

"We are seeing the creation of new jobs, but the new jobs that are being created require more skills and higher educational levels," Chao told FOX News on Friday. That's where, she said, the president's education and economic agenda comes in.

Chao also said job seekers can call a national job line — 1-877-USA-JOBS — to find local Labor Department resource offices.

Bush's poll numbers for handling the economy are up a bit since gasoline prices have fallen, according to AP-Ipsos polling.

McClellan also noted that consumer confidence is up, home-ownership rates continue to rise, including among minorities, after-tax incomes are rising, and manufacturing continues to grow. The Bush team also points to a third-quarter growth rate of 4.3 percent — the highest since early 2004.

Bush's choice of Chicago focused attention on the manufacturing-intense Midwest, which despite some recent improvements still has one of nation's weakest regional economies. The U.S. automobile industry has been hammered and manufacturing jobs continue to be lost, despite gains elsewhere.

Other scheduled events included Treasury Secretary John Snow, who was to speak at the New York Stock Exchange; Commerce Secretary Carlos Gutierrez in Louisville, Ky.; Labor Secretary Elaine Chao in Baltimore; and Energy Secretary Sam Bodman in Pittsburgh.

FOX News' Wendell Goler, Greg Simmons and The Associated Press contributed to this report.