22 August 2001, 20:20 White House sees US rebound late this year, early 2002
WASHINGTON (AFX) - The White House expects the US economy to
rebound late this year, White House budget chief Mitch Daniels said.
"We are expecting a return to economic growth at the end of this
year, the first of next year and...back on a reasonable growth track
from then on," Daniels told reporters at a briefing after release of
the Bush Administration's mid-sesion budget review.
"Economic growth is the key to continuing the very strong fiscal
picture," Daniels said, adding that a "return to growth will be the
focus of the president in the month's ahead."
Daniels defended the administration's forecast of a return to a 3.2
pct GDP growth rate in 2002.
"Our forecasts are in the mainstream of those that are out there,"
he said.
Even if growth next year is only about 1.5 pct, the surplus would
be over 100 bln usd, he said.
The revised budget outlook shows only a tiny surplus excluding
Social Security tax receipts in the current fiscal year ended Sept 30
and the 2002 fisc al year.
The budget would have shown that Social Security reserves would be
tapped this year if not for a change in an accounting method and if the
Treasury Department did not estimate that corporations would pay 5 bln
usd in taxes this fiscal year that are not due into next year.
Daniels said "the budget is in great shape and an economy that is
not" and Democrats should focus on the "real problem" of slow growth
and not on whether the Social Security reserves need to be used.
Daniels added that "all kinds of ideas" will have to be on the
table in talks with Senate Democrats to protect the Bush 1.35 trln usd
tax cut and allow for moderate spending increases in next year's
budget.
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