--O'Neill says US economic growth currently at -0.5% to +0.5%
--O'Neill says US economic growth around zero
--O'Neill says US in period of inventory correction
--O'Neill says US tax cut will help prompt consumer-led expansion
--O'Neill says Bush tax cut plan is fiscally prudent
--O'Neill says he doesn't want US tax cut over $1.6 trillion

By Simon Kennedy, BridgeNews
Washington--Feb. 9--U.S. economic growth is currently in a "narrow band" between plus and minus 0.5%, but it can expand by 3.0-4.0% without boosting inflation, Treasury Secretary Paul O'Neill said Friday. He also said President Bush's proposed $1.6-trillion tax cut would, if enacted, help prompt a consumer-led expansion.
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In four television appearances, O'Neill continued his week's work of publicly lobbying for his boss's tax cut plan, which Bush formally submitted to Congress on Thursday.
Asked by CBS-TV, if the economy was on the verge of recession, O'Neill said he agreed with Federal Reserve Chairman Alan Greenspan in that economic growth was currently around zero and was likely in a "narrow band" between plus and minus 0.5%.
He made a similar comment to NBC-TV, but added that the economy "can do better" and could expand by 3.0-4.0% without sparking inflation.
Quizzed by CNN on what had caused the recent cooling of the economy, O'Neill said he thought it was undergoing an inventory "correction" as firms trimmed stocks they had built up in anticipation of strong consumption which had actually been brought forward.
"We had huge discounts on autos and white goods so people advanced their purchases," he said, leaving producers with too many stocks later on. He added that an inventory correction is often witnessed in economic cycles.
In justifying Bush's tax package, O'Neill told CBS that lower taxes would "put money back into the hands of the people" and allow the people to "get ready for a consumer-led expansion."
O'Neill also said again that he hoped that Congress would not boost the size of the tax package with its own measures.
"President Bush thinks this is the Goldilocks program. It's just right, we don't want more," he said on NBC.
He also repeated that the tax cut fits current budget surplus projections and told ABC-TV that because the lower taxes would be phased in over a decade, the plan is "fiscally prudent." End
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