Snow Touts Tax Cuts As Wall Street Worries About Deficit

by Leroy Baker, Tax-News.com, New York

01 July 2004

United States Treasury Secretary John Snow defended President Bush’s tax cuts on the road this week, against a backdrop of rising concern from Wall Street at the escalating level of the budget deficit.

Describing the fiscal outlook as “grim” in a communication with the bank’s clients, Goldman Sachs economist Ed McKelvey argued that the government needs to take more decisive action to limit entitlements and boost tax revenues before the markets begin to sound alarm bells on the deficit.

Estimates of the budget deficit for this year vary, although most analysts are expecting a record breaking figure for the 2004 fiscal year in the region of $450 billion.

Whilst Snow has acknowledged that the deficit is “unwelcome” and needs to be reined in, the Treasury Secretary has preferred not to dwell on the point during his frequent national tours to promote President Bush’s economic agenda, choosing instead to focus on tax cuts and economic growth.

“President Bush's tax cuts, combined with sound monetary policy, made our swift economic recovery and strong current growth possible,” Snow told businesses in Anchorage on Monday.

“What a difference a year makes, and what a difference tax cuts make. Letting Americans keep more of their own money really works; it always does,” he observed.

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