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White House may be cooling to economic stimulus bill

By Major Garrett and Dana Bash
CNN Washington Bureau

WASHINGTON (CNN) -- The White House on Thursday signaled for the first time it might abandon an economic stimulus bill if the Democrat-controlled Senate fails to act and signs of recovery become more widespread.

"If the year goes along and the Senate continues to fail to take action, and there are increasing signs that the economy is coming back to sufficient levels, then that could change events," White House spokesman Ari Fleischer said.

Fleischer's comments took some congressional Republicans by surprise and came as more and more voices -- inside and outside the Bush administration -- said an economic recovery is increasingly visible.

Federal Reserve Chairman Alan Greenspan told Congress on Thursday that signs of economic recovery are more apparent. He expressed only lukewarm enthusiasm for an economic stimulus bill. "I do not think it is a critically important issue. I think the economy will recover in any event," Greenspan told the Senate Budget Committee.

Bush budget sees red until 2005 

As the Senate resumed debate on the stalled stimulus bill, Senate Republican Leader Trent Lott noted Greenspan's comments and also signaled for the first time a bill may not be needed now.

"There are a lot of mixed feelings about it," Lott said. "Is there less certainty about its need now to help the economy? Yes, there is."

He said Senate Republicans are now discussing whether a stimulus bill is still necessary, trying as they do so to gauge White House commitment. They were taken aback Wednesday when Fleischer did not emphasize the importance of individual income tax cuts in such a bill.

Glenn Hubbard, chairman of the president's Council of Economic Advisers, has predicted slow economic growth in the first and second quarters of this year but stronger growth in the third and fourth quarters.

He joined other top Bush economic advisers -- Larry Lindsey, head of the National Economic Council, and Treasury Secretary Paul O'Neill -- in predicting strong economic growth late this year. The officials, however, said administration predictions assume passage of an economic stimulus bill.

Federal Reserve Chairman Alan Greenspan:
"I do not think it (stimulus package) is a critically important issue -- I think the economy will recover in any event."

Top White House advisers also said President Bush remains committed to a bill.

"Everyone is totally committed to getting this done," a senior administration official said. But other administration officials concede the Senate's current approach makes passage of a bill unlikely.

The stimulus bill now before the Senate is open to amendments, meaning extraneous measures could be added. Eventually, the bill could collapse under the weight of provisions that have little or nothing to do with stimulating economic growth.

Added to that is a growing sense among Senate Republicans that a stimulus bill might not be necessary. Passing one in an election year, they fear, might create more public relations problems than economic benefits.

The year's projected deficit is $106 billion; next year, it's $80 billion, according to White House Budget Director Mitch Daniels.

The White House said the bigger concern is the debt load carried by the unemployed.

"If you're an unemployed American, the debt that you want to have reduced is your debt for not being able to work -- the debt that you worry about in terms of paying your electrical bills, your gas bills and your rent and your food, the health care for your family," Fleischer said.

The president and Republican leaders in the House and Senate will have an opportunity to discuss the stimulus bill as Bush hosts them this weekend at Camp David.


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