/www.bloomberg.com/ By Holly Rosenkrantz
Crawford, Texas, Jan. 2 (Bloomberg) -- President George W. Bush will propose a package of tax cuts and investment incentives next week, estimated by lawmakers to cost $300 billion over the next decade, to boost the U.S. economy and help create jobs.
He didn't reveal details of the plan, which the White House said he will announce Tuesday during a speech in Chicago. The president said he is considering all options and turned aside criticism from some Democrats that his economic policies favored businesses and wealthy individuals.
``I understand the politics of economic stimulus, that some would like to make it about class warfare,'' Bush said following a four-mile nature hike on his Texas ranch. ``I think about the overall economy, and how best to create jobs.''
The stimulus plan is intended to lift the economy from a growth rate of about 1.5 percent on an annual basis at the end of 2002 and ease unemployment that reached 6 percent in November by cutting taxes for businesses and individuals.
Senior administration officials have said it probably will contain speeding up tax cuts for individuals scheduled to start in 2004 and 2006 and reducing taxes on dividends, and may include an accelerated, or bonus, depreciation plan for businesses.
Bush previewed his stimulus plan after taking reporters on a tour of the muddy canyons and rocky cliffs on his 1,600-acre ranch and of his home, where he has been spending the holidays.
Renewed Focus
He expressed optimism about the economy, which he said will be a focus of his agenda when he returns to Washington this weekend.
``I hope the American investor realizes that the economy is pretty darn strong, given the fact that we've been through a recession and a terrorist attack, a breach of corporate confidence because of some malfeasance,'' he said.
The president last month dismissed Paul O'Neill as his Treasury secretary and Lawrence Lindsey as his top economic adviser to revive his administration's economic focus ahead of his 2004 re-election campaign.
Treasury Secretary-designate John W. Snow, chief executive of railroad operator CSX Corp., and former Goldman Sachs Group Inc. Co-Chairman Stephen Friedman, Bush's new economic adviser, will have lead roles in promoting the president's proposals. The U.S. Congress will be controlled by Bush's fellow Republicans when the House and Senate reconvene next week.
The U.S. economy has shed about 1.6 million jobs since March 2001, when the recession began, and the Standard & Poor's 500 stock index fell 23 percent last year. The 6 percent November unemployment rate matched an eight-year high.
War Costs
After expanding at a 4 percent rate in the third quarter, the economy probably grew at a 1.5 percent annual pace from October to December, according to December's consensus estimate of economists surveyed by Bloomberg News.
The White House also is preparing cost estimates for a potential war with Iraq. Budget Director Mitch Daniels said on Tuesday the administration expects the U.S. would spend about the same amount as on the 1991 Persian Gulf War, about $61 billion.
The same day Bush, offered an economic argument for military action, saying the economy would be ``crippled'' if there was an attack on the U.S. by Iraqi President Saddam Hussein or one of his surrogates.
When asked today about economic impact of the confrontation with Iraq, Bush said, ``I'm hopeful we won't have to go to war, and let's leave it at that.''
Bush also played down the prospects of war with North Korea, which has pulled out of an agreement with the U.S. to stop making material for nuclear weapons in exchange for aid. The government of the impoverished country announced last week it was reopening a reactor and other facilities that the U.S. says would enable North Korea to build more nuclear warheads.
``We will continue to resolve the situation,'' he said. He criticized the leader of North Korea, Kim Jong-Il, saying ``I have no heart for somebody who starves his folks.''