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Strengthening the Economy: Jobs and Economic Growth

The President’s Jobs and Growth Plan: Focused on Consumers and Investors

By targeting both consumers and investors, the President’s Jobs and Growth plan addresses the principal weakness in the economy – business investment – while helping to ensure that consumption continues to grow. The result: The President’s plan will help create 1.4 million new jobs over the next two years.

Targeting Business Investment

The President’s plan targets the source of weakness in the American economy – low levels of business investment.

Personal Consumption and Fixed Private Investment Chart

While consumer spending grew over the past two years, total business investment declined for eight consecutive quarters. Investment in office buildings and other commercial structures was particularly hard hit, declining at double-digit rates for four consecutive quarters.

The President’s plan will help restore business investment by eliminating the double tax on corporate income, reducing tax rates on small business income, and raising limits for small business expensing.

Ensuring Strong Consumption

Household spending, notably on autos and housing, played a key role in restoring economic growth over the past year. The President’s plan provides further support to keep consumption growing.

Under the plan, the marginal rate relief would be reflected in withholding schedules as soon as the act passes, so workers will see their paychecks grow. And the increased child credit would be rebated to parents in 2003, adding an extra $400 per child.

If Congress passes the President’s plan by July, it would return $52 billion to Americans this year.

Pro-Investment, Pro-Consumer, Pro-Jobs

By focusing both on business investment and personal consumption, President Bush’s Jobs and Growth Plan will help create more jobs fast.

The Council of Economic Advisers (CEA) projects that the President’s plan will create 510,000 new jobs in the second half of 2003 and 890,000 new jobs in 2004 – an increase of 1.4 million jobs in just 18 months. Private sector analyses reach similar results.

The CEA assumes Congress adopts the President’s proposal by July of 2003. The sooner Congress acts, the more jobs the President’s plan would help create.

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