Politics

The Blame Game

By CBSNews.com staff CBSNews.com staff

March 15, 2001 / 2:24 PM EST / CBS

Since he entered the White House, President Bush has been emphasizing how bad the economy is as part of his effort to build support for a tax cut he says will make it better. But now some top Democrats are charging the president's words have helped cause some of the panic in the stock market, CBS News Correspondent Bob Fuss reports.

"They're doing it for the short-term political gain of passing a tax cut we can't afford and don't need. They're doing it in a way that I think is very, very harmful to the economy," said Senate Democratic leader Tom Daschle at a Capitol Hill news briefing with House Democratic leader Dick Gephardt.

Democratic Sens. Charles Schumer of New York and Richard Durbin of Illinois wrote the president a letter questioning the size of his $1.6 trillion tax cut, saying it was proposed more than a year ago "at a time of unrivaled prosperity" and does not reflect today's economic realities.

"At this critical juncture, your tax cut as written will not provide the needed immediate economic stimulus and stave off a potential recession," they wrote. "In fact, your proposal could put at risk the underpinnings of our economy which have led to low interest rates and high growth rates."

At the White House, spokesman Ari Fleischer said Mr. Bush was not intending to talk down the economy but rather feels a responsibility to be "accurate and not to withhold information from the American people, but to accurately and fully describe ... the state of the economy."

"The president believes very deeply that there would be a real-world and psychological impact of a negative nature if people in government do not share accurate information with the American people," said Fleischer.

The two parties are also fighting to lay blame for the current downturn on each other. The White House insists the stock market decline began a year ago, when Democrat Bill Clinton was president, while Democrats prefer to chart the fall over the weeks since Mr. Bush became president on Jan. 20.

About $4.9 trillion in paper worth has vanished from the stock market, including the tech-heavy Nasdaq Composite Index, since it peaked in March of last year.

In recent days, however, the plunge has become precipitous, and coupled with recent reports of thousands of layoffs and a decline in retail sales, has contributed to a lowering cloud over the economy as Mr. Bush begins his term.

Fleischer made a point of saying that when the stock market began its decline a year ago, Mr. Bush was still in a battle for the Republican presidential nomination.

"So to suggest that the president's words could have caused any of these actions, when the economic slowdown actuallbegan in a period some time ago, is as wrong as wrong can be," Fleischer said.

Daschle and Gephardt produced a chart they said showed consumer confidence began falling noticeably in December when then-vice presidential nominee Dick Cheney said, "We may well be on the front edge of a recession here."

"You see how consistent consumer confidence has been until Dick Cheney started really in December and the president chimed in and everybody began to, frankly, scare consumers," said Gephardt.