With new team, Bush pledges aid to jobless

With a new economic team in place, President George W. Bush has promised to take measures to shore up economic growth and investor confidence, starting with the extension of unemployment benefits for 750,000 Americans in need of urgent aid.

Bush has overhauled his economic team in the last week, naming cargo rail company CSX Corp. Chairman John Snow as Treasury secretary, former Goldman Sachs chief Stephen Friedman as top White House economic adviser, and investment banker William Donaldson as the new chairman of the Securities and Exchange Commission.

"These leaders will assume their duties at an important moment for our economy," Bush said in his weekly radio address on Saturday. While he cited "many good signs" for the US economy, including low inflation and mortgage interest rates, Bush acknowledged, "We also face specific challenges that could slow the recovery and limit future growth."

Bush is expected to propose an economic stimulus package early next year totalling up to $300 billion, including tax breaks for corporations and individuals, hoping to reinvigorate the ailing US economy and stock market before his 2004 reelection campaign.

"Many Americans have very little money left over after taxes. Some struggle under a weight of debt that makes it difficult to save for retirement. Investor confidence needs to be strengthened in practical ways. And the nation's rate of unemployment is now six per cent, and significantly higher in some parts of America," Bush said. "We will not rest until every person in America who wants to work can find a job."

Bush said Congress' first priority should be extending federal unemployment benefits for about 750,000 Americans whose benefits will expire on December 28.

The Senate, as it shifted from Democratic to Republican control in November, passed a bipartisan bill to extend benefits through March 31, 2003. But the Republican-led House of Representatives adjourned for the year without approving the measure.

Democrats blamed Bush, saying he failed to show the leadership or concern for American workers needed to get the measure through Congress.

In his radio address, Bush countered that unemployment benefits were a top administration priority.

He said Republican congressional leaders "understand the need for early action" and asked them to make the extension of unemployment benefits "a first order of business" when Congress reconvenes in January.

Bush said the benefits they approve should be retroactive "so that people who lose their benefits this month will be paid in full," and he directed the Labor Department to take steps to expedite payments once Congress has acted.

"I look forward to working with members of both parties in the new Congress on our economic challenges," Bush said.

Bush's economic stimulus package is expected to accelerate rate cuts already enacted and include a reduction in taxes on dividends paid by companies to shareholders. Currently corporate income is double taxed - once as income and again when it is distributed to shareholders as dividends.

Several other measures that would benefit businesses are expected to be included as well, including provisions allowing companies to quickly write off more of their investments.

Bush's stimulus is likely to allow individual investors to deduct more of their stock losses against regular income.

The White House is also considering whether to speed up the scheduled increase in the per-child tax credit, a move that could help Bush garner the 60 votes needed to overcome a vote-blocking filibuster in the narrowly-divided Senate.