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Bush To Push Economic Stimulus Plan

Caption President Bush makes remarks after his walking tour of his Prairie Chapel Ranch Thursday, Jan. 2, 2003, in Crawford, Texas. Bush said he will unveil an economic-stimulus package next week, promising a plan that will benefit all Americans and rejecting criticism that his policies are tailored to help the wealthy.
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President Bush said Thursday he will unveil an economic-stimulus package next week, promising a plan that will benefit all Americans and rejecting criticism that his policies are tailored to help the wealthy.

CBS News White House Correspondent Mark Knoller reports that the president said his economic plan would focus on job creation - to help those out of work who can't find jobs. The plan is expected to include a call for new or accelerated tax cuts - but Mr. Bush rejected criticism that he's catering to the rich.

"I understand the politics of economic stimulus - that some like to turn this into class warfare. That's not how I think," the president said.

As he took reporters on a nature walk at his ranch, Mr. Bush said he's looking at all economic options - but wouldn't say if tax cuts were among them.

But aides to the president said the package probably will include acceleration of some tax cuts and breaks he won from Congress in 2001 as well as new benefits for shareholders' dividends. There also may be new tax breaks for investors and additional depreciation breaks for businesses.

To avoid a political backlash, advisers say they are likely to recommend that Mr. Bush no longer consider speeding up tax cuts for the wealthiest Americans.

Mr. Bush plans to announce his new economic stimulus plan during a speech Tuesday in Chicago to the Economic Club, White House spokeswoman Claire Buchan said.

He is expected to propose acceleration of the 2001 tax cuts for middle- and upper-income earners, but he might not include cuts in connection with the top rate, which is 38.6 percent for income over $311,950, they said.

Mr. Bush tipped his hand on the timing of the new plan's rollout on a day that saw a strong rally on Wall Street. The rally, which was well under way before Mr. Bush announced his plan, saw the Dow record a triple-digit gain.

The rally was partly attributed to good news on the manufacturing front.

U.S. manufacturing activity expanded strongly in December, the first growth in four months, according to a private industry group. The Institute for Supply Management said its index of business activity was 54.7 in December, a marked improvement from the 49.2 reading in November.

"We got a positive manufacturing report and that really was a turn-on," said Larry Wachtel, market analyst at Prudential Securities.

The Wall Street rally was also attributed to investors' relief at the end of three years of declines and to the start of a new tax year, a time when investors are busy buying stock.