OMB Watch strongly opposes the President’s “Growth and Jobs Plan to Strengthen the American Economy” for a host of reasons. There is no question that the President’s plan is bold. But it is unlikely to provide an economic stimulus now, when it is so needed; it moves the country in the wrong direction over the long-term; and it will adversely affect services upon which Americans depend while doing nothing to increase economic growth and jobs.

An economic stimulus plan will be on the table early in the next Congress. Following is the tentative schedule. Given the sudden change in Senate leadership with Sen. Trent Lott’s (R-MS) resignation as Senate Majority Leader, there is a great deal of uncertainty about how the budget process will proceed next year, including issues of timing, number of reconciliation bills, and content. The next Watcher may contain a very different timetable.

In the last year or so, we’ve seen some relatively large federal assistance provided to a few fairly large private industries. Last year, it was the $15 billion grant and loan package to “bailout” the airline industry after the September 11 attacks. At the time, it was seen as the prudent thing to do, since the federal government had grounded all flights for days until it could return some sense of security to the skies. White House Press Secretary Ari Fleischer explained that the assistance was necessary because "a safe, viable and effective commercial air travel system is important to America’s economy and to our way of life."

With the shake-up in the Administration’s economic team, the recent rise in the unemployment rate to 6% (the highest rate in eight years), and absolutely no evidence that the massive Bush tax cut has done anything but send the federal budget on a rapid spiral into deficit, a reasonable person might think that it was time for the Administration to reevaluate the idea that tax cuts are the solution to everything. The President’s economic stimulus plan, currently in the design phase, however, is expected to consist of tax cuts aimed at corporations and individuals in the higher tax brackets.