Dubya Gets Down To Business

President-elect Bush praised a cut in interest rates by the Federal Reserve Board on Wednesday as one of the steps necessary to "make sure that our economy does not go into a tailspin."

But he said it will not do the job alone, and that his tax cut plan remains vital.

Talking to reporters after a meeting with top executives in Austin, Tex., Bush said he interpreted the Fed's surprise move as meaning that bold action is needed "to make sure this economy stays vibrant."

Bush's chief economic adviser, Larry Lindsey, bolted from the closed economic meeting at a hotel to catch a TV report on the development.

"Great! The Fed is always right," Lindsey said after asking reporters the size of the cut and before returning to the meeting to inform Bush and some three dozen CEOs.

The Fed, in an effort to boost a slowing economy, said it was cutting its target for the federal funds rate - the interest banks charge each other on overnight loans - to 6 percent from 6.5 percent, a nine-year high. It also cut its mostly symbolic discount rate by a quarter point to 5.75. The Fed said it stands ready to cut the discount rate by another quarter point to 5.50 percent on the request of Federal Reserve banks.

But, reports CBS News Chief White House Correspondent John Roberts, the Fed's move highlights the fundamental difference between Bush and Fed Chair Alan Greenspan over how best to spur economic growth - through cutting interest rates or cutting taxes.

"Alan Greenspan was mindful of the warning signs by taking a bold step," said Bush. "When I get sworn in as president, I intend to take another bold step and that is to ask the Congress to work with us to enact tax reform and tax reductions."

Rallying support for the proposal from the corporate side, a fleet of business leaders, many of whom contributed to the Bush campaign, filled the VIP lot at the Austin airport Wednesday, and personally delivered some bad news on the economic downturn.

"It has been sharp and real and consumers have felt the pinch,and have held back in their spending," said General Electric CEO Jack Welch.

Other notables attending the ecnomic summit with the president-elect included Steve Forbes, one of Bush's rivals for the GOP presidential nomination last year; Michael Dell, CEO of Dell Computer Corp.; and Dan Carp, CEO of Eastman Kodak Co.

The idea of a tax cut to spur spending and growth found also some support from an unlikely quarter: Democratic leaders who finally uttered the words "looming recession" and said their election proposals for modest tax relief may have to look more like the Republican plan.

"I think we need a tax cut," House Minority Leader Dick Gephardt, D-Mo., said on NBC's Today show. "I've felt that and Democrats have felt that way for a long time. I don't know the exact size. It may be that it has to get bigger because the recession is looming and we've goeconomic worries out there."

Gephardt added, "I think we can work out a compromise where everybody gets some of what they want" from a tax cut.

While pressure is building for a tax cut of some kind, what form it takes will provoke sharp debate between the White House and Capitol Hill. Democrats still oppose the Bush plan for an across-the-board cut. And even Republicans say that if Mr. Bush hopes to pass his huge tax cut, he will need to cut it into bite-sized chunks that Congress can swallow.

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