WASHINGTON — President Bush, proclaiming the United States in "excellent economic health," sent his first economic report to Congress today. He promised to restrain government spending and push for tax cuts to foster even more prosperity.
Bush said he will continue his fight to get Congress to reduce the capital gains tax and pledged anew to fight protectionist trade barriers.
His message did not dwell on what many see as the biggest failures of the Reagan years--the record federal budget deficits and the huge trade imbalances that transformed America from the largest creditor nation to the largest debtor country.
Bush did pledge to deal with "inherited problems," but his formula for dealing with the budget deficit tracked Reagan's approach, promising to oppose new taxes while relying on economic growth and restraints in government spending to erase the deficit by 1993.
Many private economists say the Administration's economic outlook for the next five years is too optimistic.
The Administration foresees no recession, with the gross national product expanding at annual rates of 3% or higher from 1991 through 1995. "Economic expansions . . . do not die of old age. A recession is not likely in the near term," the economic report states.
While stressing traditional Republican free-market themes, the 419-page, annual "Economic Report of the President" avoided some of the more doctrinaire positions on monetary policy and supply-side economics sounded during the Reagan years.
Instead, Bush used the message, the first presented by his Administration, to lay out generally mainstream economic goals such as the need for growth-oriented policies and renewed efforts to bring the federal deficit under control.
On taxes, Bush said: "One of my highest legislative priorities this year is to reduce the capital gains tax rate. This tax reform would promote risk-taking and entrepreneurship by lowering the cost of capital. . . . A capital gains tax cut would stimulate saving and investment throughout the economy."
"The primary economic goal of my Administration is to achieve the highest possible rate of sustainable economic growth," Bush said in the report. "Growth is the key to raising living standards, to leaving a legacy of prosperity for our children, to uplifting those most in need and to maintaining America's leadership in the world."
