WASHINGTON – Vice President Dick Cheney stumped for President Bush's proposed economic stimulus plan Friday, telling business leaders that the massive tax cut package is the best way to get America's economy back on its feet and running at full speed.
Democrats immediately blasted the plan, calling the would-be effects too "miniscule" and saying it could ultimately lead to "fiscal Armageddon."
Cheney told the U.S. Chamber of Commerce that despite criticism that the plan is too expensive and won't provide immediate relief, the cost of an economic slowdown is much greater than the cost of the president's plan.
"The president has proposed a plan that would benefit all Americans," he said. "We believe we'll speed economic recovery and the pace of job creation."
Cheney said that the government's role is not to create wealth or jobs but to implement policies that create the environment for companies to "take risks, innovate, invest and hire more people."
"Lower taxes, sensible regulation and more freedom -- that's the way to lift wages and to build prosperity all across the country," he said.
Cheney was speaking to a receptive audience about the details of Bush's $674 billion stimulus proposal, unveiled in Chicago on Tuesday. Provisions include accelerating scheduled child credit and marginal rate tax cuts to give taxpayers an average of $1,083 of relief this year; eliminating the double taxation of dividends, providing small businesses with higher deductibles on investment and offering states money to assist jobless workers.
Almost immediately after Cheney stepped down from the podium, members of the Democratic Policy Committee stepped up to their own, mincing no words in their criticism of the plan.
Senators said the tax package will only benefit the wealthy and won't put money in the taxpayers' pockets soon enough.
"I don't know where Vice President Cheney is coming up with his analysis," said Sen. John Corzine, D-N.J., calling the entire proposal "anti-growth." "The fact is, we want to put money in the hands of people who can turn around and spend it."
House Democratic leader Nancy Pelosi, D-Calif., was also quick to point out that the president's own Council of Economic Advisers said the president's plan will only create 190,000 jobs in the short run, about the same number of jobs lost in the last two months.
"This morning, at the same time that the new job loss numbers were being announced, Vice President Cheney was out touting the Bush economic plan. And yet most economists agree that the Bush plan is not a stimulus plan at all and will not have any real immediate impact on the economy," Pelosi said in a written statement. "When is President Bush going to realize that job creation needs to be his top priority?"
The White House has pushed hard on the program this week as the president has given two speeches and has lobbied congressional leaders to support the package. Despite the push, Cheney made sure to stress that the administration's top priority this year is the war on terror.
"Make no mistake, America is at war," he said. "America and the civilized world have but one option -- wherever the terrorists operate, we will find them ... we will remain vigilant at all times."
Cheney said preserving a civilized world is the reason for "confronting the threat posed by Iraq ... it is absolutely crucial to winning the war on terror."
Critics of the Bush administration have said the White House's focus on Iraq is distracting the U.S. war on terror here at home. But Cheney said the threat that Iraq may use, or provide to other countries, weapons of mass destruction, is reason enough to ensure disarmament.
But economic security here at home is paramount to a successful war effort, Cheney said, and to boosting American confidence in those endeavors.
While in the past year, Congress passed bills that helped give Americans early tax relief, authorized trade promotion authority for the president and sent a terrorism insurance bill to the president's desk, this year's priorities are aimed at providing citizens with more affordable health coverage, creating a comprehensive energy bill and enacting legislation to put an end to "unfair, frivolous" lawsuits against businesses and doctors.
Cheney said the administration also remains committed to making sure the Bush tax cuts are permanent and to a permanent repeal of the death tax.
"All these are crucial to the country's economic security," Cheney said.
He added that, "despite the recession we inherited, despite 9/11 and despite the corporate scandals, America's economy is growing."
Personal income in the United States is rising faster than inflation, and mortgage rates are at 40-year lows, the vice president said. Home ownership is high, while worker productivity increased by 5.6 percent during the last four quarters for which the government has data, the sharpest increase since 1993.
But the economy could grow faster, Cheney said.
"Our job now is to preserve the hard-won gains our economy has made … and to expand the reach of our prosperity in both the short and the long term," he said.
The Bush tax plan will return $30 billion a year to the American people, who can use the money to invest. Cheney said that alone should also encourage more "responsible" behavior of corporate America and discourage it from artificially inflating profits to cause a temporary spike in stock prices.
But Democrats said the administration's biggest tax policy flaw is that it can't even admit the current policies aren't working, even though Bush just recently replaced major players on his economic team.
"It certainly does this country no favors to deny the failure of these economic policies," said DPC Chairman Byron Dorgan of North Dakota.
Dorgan said although he thinks there should be some sort of tax cut, "I don't think we ought to break the bank," particularly if it's mainly the upper class that will benefit.
Sen. Mark Dayton of Minnesota went so far as to call the Bush plan "one, if not the worst, tax policies ever made by an American president" and "obscene catering to the greed of the super-rich in this country."
Dorgan said the Democratic caucus is particularly concerned over the dividend proposal of the Bush plan, saying it will "blow a hole" in the federal deficit, particularly "at a time when we are up to our neck in federal deficits as far as the eye can see."
"I know of no one who thinks it's a good idea" within the caucus, he said.