NEWS: US DJIA surges 300 in minutes after Fed cuts 50bp (0.5%)

Bush says Fed rate cut 'not enough' to stimulate growth


Date: 03/01/2001 20:33
AUSTIN, TX (AFX) - President-elect George W Bush said the Federal Open
Market Committee's decision to cut the federal funds rate to 6.0 pct from 6.5
pct was "not enough" to stimulate growth.
He said his across-the-board tax cut will also be needed to help the economy
recovery.
After a closed-door economic forum with prominent businessmen, Bush was
asked if the Fed's rate cut would make it harder to gain Congressional support
for his 1.3 trln usd tax cut.
Bush replied, "not in the least."
"I think if you were to talk to business leaders here, they would tell you a
rate reduction of one-half percent is not enough to serve as a stimulus to
encourage capital formation, economic growth, job creation," Bush said.
"It is going to require not only monetary policy reform but also fiscal
policy reform," Bush said.
Bush said his tax cut proposal was "an integral part of economic recovery."
He said the business leaders told him "bad news" about the health of the
economy, "that their sales are slowing, they are having to trim back their
workforce."
Bush said the FOMC rate cut was a "bold step" and said he planned to "take
another bold step to ask Congress to work with us to enact tax reform and tax
reductions."
Jack Welch, the chairman of General Electric Co, said that there has been "a
significant slowdown (in the economy) in the fourth quarter."
"I think the move by Mr Greenspan was welcomed by everybody here," Welch
said.
Separately, Bush named Lawrence Lindsey, his top campaign advisor, as
assistant to the president for economic affairs.
gar/pav/


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