WASHINGTON: The American economy is improving in the aftermath of its recession and other setbacks, but is still not growing quickly enough, said President George W. Bush.
In his State of the Union speech overnight, Bush touted his US$674bil stimulus proposal and pledged to focus on job creation.
“We must have an economy that grows fast enough to employ every man and woman who seeks a job,” he said. “After recession, terrorist attacks, corporate scandals, and stock market declines, our economy is recovering – yet it is not growing fast enough, or strongly enough.”
But the speech, for which financial markets had been waiting on tenterhooks, did not detail any new economic initiatives beyond the stimulus plan Bush had outlined earlier this month.
In world financial markets, the US dollar fell sharply right before the speech on a rumour – which proved unfounded – that the US president would declare war on Iraq.
The greenback subsequently recovered slightly, but investors remained on edge as the threat of war still loomed large amid a vow by Bush to use the full force of the US military if needed against Iraq.
Many economists believe the concerns over war have been a significant factor weighing on US economic growth in recent months, as the uncertainty has caused some businesses to hold back hiring and investment plans.
Starting late last year, when the White House announced a major reshuffle of Bush’s economic team, the president has been making a big push to shore up confidence in his handling of the economy.
After ousting Treasury Secretary Paul O’Neill and White House economic adviser Lawrence Lindsey, Bush nominated railway executive John Snow as Treasury chief and named Wall Street veteran Stephen Friedman to replace Lindsey.
Snow appeared on Capitol Hill earlier on Tuesday for his confirmation hearing and he pitched the Bush tax cut proposal while, like the president, giving particular emphasis to a goal of robust job creation.
Bush’s economic plan would eliminate taxes that investors pay on dividends and speed up previously enacted cuts in income taxes. It would also provide a US$400-per-child increase in the tax credit for families with children.
But many Democrats are strongly opposed to the plan and even some moderate Republicans have expressed reservations, signalling that it will be difficult for Bush to secure passage of the programme in Congress.
Critics have denounced Bush’s plan as a windfall for the wealthy that would swell the government deficit without providing the quick shot of adrenaline the economy needs. – Reuters
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