| Economists Blast Bush Tax-Cut Proposal |
Mon Feb 10, 2:47 PM ET
WASHINGTON (Reuters) - Economists led by 10 Nobel laureates on
Monday attacked President Bush $695 million tax-cut
proposal, arguing that the cuts fail to address the problems facing the U.S.
economy and will add to long-term budget deficits.
Their signed statement, to run this week as a
full-page advertisement in the New York Times,
comes as Congress prepares to examine the
details of the Bush proposal.
Economic growth that is not sufficient to generate
jobs, corporate scandals, business overcapacity
and uncertainty continue to weigh on the U.S.
economy, the statement said.
"The tax plan proposed by President Bush is not
the answer to these problems. Regardless of how one views the specifics of
the Bush plan, there is wide agreement that its purpose is a permanent
change in the tax structure and not the creation of jobs and growth in the
near term. The permanent dividend tax cut, in particular, is not credible as a
short-term stimulus, said the statement, signed by more than 400
The Nobel laureates include Joseph Stiglitz, who served on the White House
council of economic advisers under President Bill Clinton.
The economists' statement, is sponsored by the Economic Policy Institute,
a liberal Washington think tank.
The four-paragraph statement, made public at news conference on Monday,
said the economy is expanding but not fast enough to create jobs.
The administration plan calls for an end to taxes paid by individuals on
corporate dividends and acceleration of planned income tax cuts.
Administration officials, including Treasury Secretary John Snow, are
planning a series of meeting this week across the country intended to
generate public support.
The proposal, which has come under fire from congressional Democrats, will
reduce federal revenues by nearly $700 billion over the next decade.
Democrats argue the tax cut will benefit mostly the wealthy while adding to
budget deficits. Republican backers argue the tax cuts will lift economic
growth and bring in more revenues.
Moderate Republicans who hold key votes in the narrowly divided Senate
are, however, cool to the proposed dividend tax cut, the centerpiece of
Lawmakers this week will begin to take a closer look at the plan. The
Senate Finance Committee has scheduled two days of hearings this week.
Separately, Federal Reserve Chairman Alan Greenspan
is expected to his offer assessment of Bush's proposal in
testimony on Tuesday to the Senate Banking Committee and on
Wednesday to the House Finance Committee.