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Cheney says Bush budget is solid

WASHINGTON (CNN) -- Vice President Dick Cheney sought Wednesday to counter charges that President Bush's budget plan is "too good to be true," telling a friendly audience of manufacturing executives that the budget and tax cut plans are based on very conservative assumptions.

Vice President Dick Cheney  

Cheney said charges that "after the tax cut, there's no room for anything else in the budget," are "wrong, factually untrue ... because of course there is 4 percent growth in discretionary spending. The overall increase in federal spending when you add in the entitlements next year is $100 billion."

Cheney said the budget and the 10-year, $1.6 trillion tax cut are based on an economic forecast that is very conservative.

He said the budget assumes that:

-- Revenue growth over the next 10 years will be slower than the economy is actually growing.

-- There will be no increase in productivity in the federal government, even though private sector productivity is growing at about 3 percent per year.

-- Revenue from the tax cut will be static, even though he says it's likely the tax cut will stimulate some revenue.

-- There will be growth in entitlement and other spending and higher inflation.

"This notion that somehow this is a fly-by-night or shaky set of assumptions or that we're straining to come up with an economic justification for the package simply isn't true," Cheney said.

Cheney joked as he began his remarks by describing the atmosphere on the podium behind President Bush, where he sat with House Speaker Denny Hastert. "We were really worried that the events would be overwhelmed by our charisma."

Bush makes first stop on tax-cut tour (February 28, 2001)
Bush demands tax refund for Americans (February 27, 2001)

The White House: Vice President Richard Cheney
Office of Management and Budget

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4:30pm ET, 4/16

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