Cheney: Economy Needs Permanent Tax Cuts

Cheney: Economy Needs Permanent Tax Cuts

By JENNIFER LOVEN, Associated Press Writer

WASHINGTON - Vice President Dick Cheney (news - web sites) said Wednesday that it is critical to make President Bush (news - web sites)'s tax cuts permanent during his second term, while achieving broader reforms in the tax code and bolstering Social Security (news - web sites).

Speaking at the start of a two-day White House conference on the economy, Cheney said the administration would put a top priority on making the tax cuts, which are all due to expire after 2010, permanent as a way of bolstering future economic growth.

Cheney said the administration had accomplished a great deal in its first term but a number of unfinished items remain for Congress to address.

"We still have more work to do, but we believe we are on the right track," Cheney told the audience of business leaders, economists and Washington lobbyists.

The administration is hoping to build momentum for Bush's ambitious second-term agenda during the two-day White House-sponsored conference. Various panels were scheduled to address Bush's proposals on overhauling the tax code and Social Security as well as promoting freer trade and placing limits on lawsuits.

However, the effort is already facing major obstacles with such groups as AARP, which represents millions of retired people, and organized labor, represented by the AFL-CIO, vowing to fight Bush's proposals on Social Security reform in Congress.

Harvard economics professor Martin Feldstein, participating in a panel on current economic conditions, said he believes the country has emerged from the 2001 recession and the prolonged period of weak job growth.

"I'm pleased to say the economy is now in very good shape," Feldstein said. "National income is growing, growing at an above-trend pace, employment is rising, inflation is low. So by all of the key measures, we're in good shape."

"These favorable conditions reflect good policies and also sound economic structure," said Feldstein, a Republican who is a candidate to succeed Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites).

"The weakness of the economy we worried about a few years ago is now essentially all gone thanks to supportive, stimulative Fed policy and the combination of personal tax cuts and the tax incentives for business," he said.

He plugged Bush's top domestic priority: reforming Social Security and including a private retirement account option.

As he spoke, Cheney sipped from a coffee mug and took notes.

Bush aides acknowledge new proposals aren't in the cards for the forum on Wednesday and Thursday at the Reagan federal office building near the White House.

Bush planned to listen to a panel on lawsuit reform Wednesday and deliver remarks closing the sessions Thursday afternoon.

The speeches and panels are meant to highlight the president's major plans for boosting the economy: overhauling Social Security and the tax code, making recently passed tax cuts permanent, curbing lawsuit abuse, restraining federal spending, helping educate and train workers in a changing economy, making international trade freer, reducing the regulatory burden on businesses and passing a comprehensive energy plan.

"The president has outlined specific ways that we can move forward to continue to strengthen our economy," White House press secretary Scott McClellan said. "The president has not outlined all the specifics of some of those initiatives, and they (the panelists) will be able to provide some useful and thoughtful insight into how we move forward on implementing those policies."

Creating more jobs is an important task for Bush. The still-recovering job market has been seized upon by Democrats who contend the president's economic policies have failed to induce enough steady hiring expansion by businesses.

The economy added a net 112,000 jobs in November, considerably fewer jobs than analysts had expected and a big drop from the 303,000 positions added in October.

More than 2 million jobs have been created in the past year, but Bush remains 313,000 jobs short of avoiding a net loss of jobs during his presidency.