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White House: Tax cuts will lead to jobs
After weak report, Evans and Snow say Bush policies will eventually turn employment picture around.
January 11, 2004: 5:10 PM EST

WASHINGTON (CNN) - Two of President Bush's top advisers said Sunday they remain confident the administration's tax cuts will spur job creation soon despite a disappointing hiring report last week.

"The tax relief the president has given to this economy is working," Commerce Secretary Don Evans told CNN's "Late Edition with Wolf Blitzer." "On three separate occasions over the last three years, he's provided additional tax relief for American workers, American families, businesses across America, and guess what? It's working. The results are showing that it's working."

The Bush administration has credited the tax cuts it pushed through Congress since 2001 for the economy's recent growth spurt, including an 8.2 percent boost in gross domestic product for the third quarter of 2003. But job creation has lagged: The economy produced a net gain of only 1,000 new jobs in December, the Labor Department said Friday -- far below the 130,000-plus that economists expected.

Critics say the tax cuts have resulted in a half-trillion-dollar budget deficit while failing to prevent a net loss of more than 2 million jobs during Bush's presidency.

But Evans, the former chairman of Bush's 2000 campaign and a close friend of the president, said 250,000 new jobs have been created in just the past five months and said the 2001 Bush tax cuts -- which passed Congress as a temporary measure -- should be made permanent.

Barely a week into an election year, the Labor Department said the national unemployment rate dropped to 5.7 percent in December -- but that drop came largely because 309,000 people dropped out of the U.S. work force. And the number of new jobs created in November was revised downward, to 43,000.

However, Treasury Secretary John Snow predicted that hiring will pick up in 2004.

"All the evidence points in that direction," Snow told ABC's "This Week." "And everything we know about economics indicates that, as you get an economy into high gear, as you get a strong recovery under way, it does translate into jobs."

Snow has backed away from earlier predictions that the tax cuts President Bush pushed through Congress last year would produce 200,000 or more new jobs a month. But he said making those tax cuts permanent would be "the best single thing we can do to encourage the continuing upward course of the economy."

The tax cuts, combined with the 2001 recession and the costs of wars in Afghanistan and Iraq, have resulted in budget deficits that could top $500 billion this year. The International Monetary Fund warned last week that long-term U.S. budget deficits could pose "significant risks" to the global economy, and Bush's potential Democratic opponents have seized on the issue as well.

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"This administration has taken us into the largest fiscal deficit in our history. The dollar is at an all-time low, and 3 million people lost their jobs," said Sen. Joseph Lieberman, D-Conn., told "Fox News Sunday."

Snow said the administration is "not happy" about the size of the budget deficit, but said it was "understandable" under the circumstances. He said Bush is committed to cutting the deficit in half within five years with a combination of increased tax receipts from economic growth and spending cuts, which he did not specify.  Top of page

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