Help implement economic plan: Bush

By Sridhar Krishnaswami

WASHINGTON, JAN. 4. The U.S. President-elect, Mr. George Bush, is closing out a two- day economic summit in Texas today with a hope and a promise - that industry leaders will take the lead in supporting his broad based economic plans for the next four years including a massive tax cut plan. He also told the business leaders that his administration would be sympathetic to their legitimate concerns especially as it pertains to issues of government regulations.

Even as Mr. Bush was closeted with a group of CEOs on Wednesday, the Federal Reserve Board had cut the interest rate by one half per cent. Because of the unexpected but welcome move, the Nasdaq registered its biggest one day gain ever and the Dow Jones average went up by more than 300 points, much to the delight of the captains of the industry.

``Great, the Fed is always right,'' said Mr. Bush's economic adviser, Mr. Larry Lindsey, who had to briefly leave the session to watch television on the Federal Reserve's move. The executives at the summit are said to have applauded the move as many of the high tech companies have been hard hit in the last several weeks as a result of the slump in the markets and a dip in sales.

On Thursday, Mr. Bush will continue his economic meeting by getting behind closed doors again with some 15 leaders of the high tech industry. The leaders of the industry are expected to highlight their concerns that include the role of the government, trade and immigration. One notable absentee from the meeting is Microsoft. A spokesman for the company has said that its chief operating officer was invited to attend but could not make it as a result of a previously scheduled event.

Analysts say the summit has a two-fold objective for Mr. Bush. He is using the business leaders to help push his $1.3 trillion tax cut plan and at the same time sending the message to the industry that he will stand by his election pledges. For instance, Mr. Bush has been receptive to the idea of increasing visas for foreign workers to get around the domestic shortages.

But the political significance of the economic meeting in Austin, Texas has not been missed. The Clinton administration may be miffed at the constant talk of a recession but the Republican President-elect and his team are deliberately using the occasion to whip up support for the tax cut plan. The Bush team is making the point that recent reports suggest that the economy is performing at its worst since 1991.

The incoming Bush administration may be hearing the right things from Capitol Hill and from the right persons. The Minority Leader of the House of Representatives, Mr. Richard Gephardt, has said that since the economy is slowing, Congress may have to pass a larger tax cut package than many Democrats favoured. But the Senior Democratic leader has also made the point that his party will continue to oppose the Bush present plan as it is seen as being weighted to the higher income groups.

``I think we need a tax cut...I don't know the exact size. It may be that it has to get bigger because the recession is looming and we've got economic worried out there,'' Mr. Gephardt said. The 107th Congress convened on Wednesday.

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