Skip to main content
Inside Politics
CNN Europe CNN Asia
On CNN TV Transcripts Headline News CNN International About Preferences
powered by Yahoo!

Bush: Urgent need for 'bold' economic plan

Bush announces his economic stimulus plan in Chicago on Tuesday.
Bush announces his economic stimulus plan in Chicago on Tuesday.

   Story Tools

more video VIDEO
U.S. President Bush announced a new economic plan that he says will create millions of jobs by encouraging small business growth and consumer spending. CNN's Dana Bash reports (January 8)
premium content
• Cost: $670 billion over 10 years
• Eliminates tax on stock dividends
• Tax breaks for businesses,   individuals
• Increases child tax credit
• Extends unemployment benefits
• Decreases so-called marriage penalty tax
• Increases federal funds for needy states

CHICAGO, Illinois (CNN) -- President Bush on Tuesday announced a new economic plan that would cost roughly $670 billion over 10 years, offer 92 million taxpayers an average tax cut of $1,083 and create 2.1 million jobs over the next three years.

"The jobs and growth proposals I've outlined today are a focused plan to encourage consumer spending, to promote small business growth, to boost confidence in our markets and to give critical help to unemployed citizens," Bush said in a speech at the Economic Club of Chicago. (Text of speech)

"These tax reductions will bring real and immediate benefits to middle-income Americans," the president said. "Real money to help pay the bills and push the economy forward.

"I proposed a bold plan because the need for this plan is urgent," Bush said. (Plan details)

Democrats are challenging the Bush administration's assumptions and also warning the plan will cause a major increase in deficit spending.

Sen. John Edwards of North Carolina, a Democratic presidential hopeful, said Bush's plan was unfairly beneficial to the wealthy.

"This plan makes no sense if what the goal is is to stimulate the economy now and do it in a way that's fiscally responsible so that we send the right signals to Wall Street and the right signals to the American people," Edwards said after Bush's address.

A centerpiece of the Bush plan, with a price tag of more than $300 billion, is a proposal to end personal income taxes on corporate dividends. The White House bills this change as a major incentive to encourage investment by individuals and businesses, which in turn would create new jobs. (Benefit breakdown)

The administration estimates this provision would add $20 billion to the economy in new investment and related activity. (Impact debate)

But Sen. Jon Corzine, D-New Jersey, said the plan would do little to boost the economy and could encourage companies to hold onto their cash in order to boost dividends rather than spend it to create jobs.

The Bush plan calls for new incentives designed to spur business investment and for the creation of $3,000 "Personal Re-employment Accounts" to help some unemployed Americans find jobs.

States would administer the jobs program, but it would be funded with federal money. Money in the accounts could be used for child care, job training, relocation, transportation and other job-search expenses.

"If a job is attained quickly, within 13 weeks," Bush said, "the worker will be able to keep the cash balance as a re-employment bonus."

Those accounts, according to the White House, would be available to about 1.2 million Americans -- new and existing recipients of unemployment benefits who are deemed likely to exhaust those benefits before finding work, or former unemployment insurance recipients who meet certain eligibility requirements.

"I worry about people who are out of work. They need our help, both in short-term benefits and long-term opportunity," Bush said.

On the other end of Pennsylvania Avenue, House Democrats announced a one-year, $136 billion package, which they said will have a more immediate effect. (Bush vs. Dem plan)

"What we've done is design a package that is front-loaded and fast-acting deliberately," U.S. Rep. John Spratt, D-South Carolina, said at a news conference. (Full story)

The Bush proposal would accelerate plans to end the so-called marriage penalty on two-earner couples, making the full implementation effective immediately instead of in 2009. The White House said 46 million married couples would benefit.

In addition, Bush wants to raise the child tax credit from $600 per child to $1,000 per child this year, instead of in 2010 as called for in the original Bush tax cut plan.

The package would extend unemployment benefits, which lapsed last month after Congress failed to approve an extension.

Administration officials said the Bush plan includes tax breaks for businesses and individuals, including write-offs for businesses that purchase certain equipment. (Full story)

Bush said his plan would cut taxes retroactively to January 1.

CNN White House correspondents John King and Suzanne Malveaux and Capitol Hill Producer Ted Barrett contributed to this report.

Story Tools

Top Stories
Panel: Spy agencies in dark about threats
Top Stories
CNN/Money: Security alert issued for 40 million credit cards
© 2004 Cable News Network LP, LLLP.
A Time Warner Company. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines. Contact us.
external link
All external sites will open in a new browser. does not endorse external sites.