Bush on Saturday and running mate Dick Cheney yesterday argued that a tax cut could be the right move to stimulate the economy and stave off any chance of a recession next year.
Many economists disagree.
The best way to manage the ups and downs of the business cycle, they say, is to leave the job in the hands of the Federal Reserve Board. The Fed governors raise or lower interest rates to slow down or speed up the economy. Support for using fiscal policy taxes and government spending for that purpose has dwindled in recent decades. The plan faces opposition from Democrats, who say it favors the wealthy, and from fiscal conservatives, who worry that it would send the federal budget into deficit. The narrow majorities in the next Congress have led most political analysts to conclude that Bush will need to scale back his plan to win approval for it in Congress.