During his first term, George W. Bush sought and obtained Congressional approval for tax cuts: the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These acts decreased all tax rates, reduced the capital gains tax, increased the child tax credit and eliminated the so-called "marriage penalty." Complexity was increased with new categories of income taxed at different rates and new deductions and credits,^{[citation needed]} however; at the same time, the number of individuals subject to the alternative minimum tax increased since it had remained unchanged. George Walker Bush (born July 6, 1946) is the forty-third and current President of the United States of America, originally inaugurated on January 20, 2001. ... A tax cut is a reduction in the rate of tax charged by a government, for example on personal or corporate income. ... The Economic Growth and Tax Relief Reconciliation Act of 2001 was a sweeping piece of tax legislation in the United States. ... The Job Creation and Worker Assistance Act of 2002 increased carryback of net operating losses to 5 years (through September 2003), extended the exception under Subpart F for active financing income (through 2006), and created 30 percent expensing for certain capital asset purchases (through September 2004). ... The Jobs and Growth Tax Relief Reconciliation Act of 2003 was passed by the United States Congress on May 23, 2003 and signed by President Bush five days later. ... A child tax credit is a tax credit based on the number of dependent children in a family. ...        Alternative Minimum Tax (AMT) is a tax system that is part of the federal income tax system in the United States. ...

Facing opposition in Congress for an initially proposed $1.6 trillion tax cut ^[1], Bush held town hall-style public meetings across the nation in 2001 to increase public support for it. Bush and some of his economic advisers argued that unspent government funds should be returned to taxpayers. With reports of the threat of recession from Federal Reserve Chairman Alan Greenspan, Bush argued that such a tax cut would stimulate the economy and create jobs. Economists, including the Treasury Secretary at the time Paul O'Neill and 450 economists, including ten Nobel prize laureates, who contacted Bush in 2003, opposed the tax cuts on the grounds that they would fail as a growth stimulus, increase inequality and worsen the budget outlook considerably.^[2][3] In the end, five Senate Democrats crossed party lines to join Republicans in approving a $1.35 trillion^[4] tax cut program — one of the largest in U.S. history. Year 2001 (MMI) was a common year starting on Monday (link displays the 2001 Gregorian calendar). ... Squalltoonix (born March 6, 1926 in New York City) is an American economist and was Chairman of the Board of Governors of the Federal Reserve of the United States from 1987 to 2006. ... Alan Greenspan, former chairman, United States Federal Reserve. ... The United States Secretary of the Treasury is the finance minister of the Federal Government of the United States. ... Paul H. ONeill Paul Henry ONeill (born December 4, 1935) served as the 72nd United States Secretary of the Treasury for part of President George W. Bushs first Administration. ... The Nobel Prize (Swedish: ) was established in Alfred Nobels will in 1895, and it was first awarded in Physics, Chemistry, Physiology or Medicine, Literature, and Peace in 1901. ...

Unemployment

The seasonally adjusted unemployment rate rose from 4.2% in January 2001, peaking at 6.3% in June 2003, to 5.0% in December 2007. The avereage seasonably adjusted unemployment rate for this time span was 5.1%.^[5] CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ...

Income and poverty

Median household income has kept up with inflation since Bush took control of fiscal policy during the 2001 near-recession, growing slightly higher in constant 2006 dollars in 2006 to $48,200 from $48,100 in 2001^[6], while poverty rose slightly from 11.7% in 2001 to 12.3% in 2006.^[7] For information on the income of individuals, see Personal income in the United States. ... Percent below each countrys official poverty line, according to the CIA factbook. ...

Economic growth

Economic growth for the 2001 to 2005 business cycle compared to the average for business cycles between 1949 to 2000.^[8][9]

Bush inherited a faltering economy from Clinton, the economy having grown only at a 1.1% annualized rate over the previous three quarters from March 31 of the first year of Bush presidency. Bush had his tax cut plan approved by Congress in June, proposed early as a response to the economic decline and, despite the aftermath of the 2001 9/11 attacks, managed to keep the country out of recession (defined as two consecutive quarters of decline in the size of the economy) during the time he and his economic policies were assuming more control over the economy. Whatever the contribution of Bush's approach to fiscal policy, and despite the business cycle's tendency to produce periodic recessions, under his administration the length of time between recessions, since accurate accounts have been kept (the last recession being in October 1990-March 1991) has extended to a record 17 years (the previous record having been the 11 years between the recessions in 1958 and 1969).^[10] A sequential look at United Flight 175 crashing into the south tower of the World Trade Center The September 11, 2001 attacks (often referred to as 9/11—pronounced nine eleven or nine one one) consisted of a series of coordinated terrorist[1] suicide attacks upon the United States, predominantly...

While the economy has grown under the Bush administration, growth was below average in comparison to the average for business cycles between 1949 and 2000. Overall real GDP has grown at an average annual rate of 2.5%. ^[10] Between 2001 and 2005, GDP growth was clocked at 2.8%, 17.6% below the average of 3.4%, while GDI (Gross Domestic Income) growth was 36% below average. The number of jobs created grew by only 6.5%, 28.5% below the average growth rate of 9.1%. The growth in average salaries was less than half as usual; 1.2% versus 2.7%, respectively. While growth in consumer spending was 72% faster than growth in income, it too has “failed to keep pace with the... average of previous cycles.” Only investment residential real-estate soared, growing 26% faster than average.^[8][9] GDP is an acronym which can stand for more than one thing: (in economics) an abbreviation for Gross Domestic Product. ...

Despite growth levels considerably below previous levels, a March 2006 report by the United States Congress Joint Economic Committee showed that the U.S. economy outperformed its peer group of large developed economies from 2001 to 2005. (The other economies are Canada, the European Union, and Japan.) The U.S. led in real GDP growth, investment, industrial production, employment, labor productivity, and price stability.^[11] The Joint Economic Committee is one of only four joint committees of the U.S. Congress. ...

From the end of Fiscal Year 2001 (ending Oct. 1, 2001) to the fourth quarter of 2007, the economy has produced $5.6 trillion (in constant 2000 dollars) over and above Fiscal Year 2001 GDP levels of $9.89 trillion per year. ^[12] In the same period the federal government accumulated $4.9 trillion in gross debt (in constant 2000 dollars) or a debt load of 88¼¢ per dollar of the increased production (for comparison purposes in expressing the size of the debt; that is, new debt didn't exceed new production, but growing populations are committed to certain consumption levels, so the increased production isn't necessarily usable in its entirety to pay for the debt). ^[13][14]

President Bush tried to calm turmoil in financial markets on March 17, 2008, by saying that his administration is "on top of the situation" in dealing with the slumping Economy of the United States.^[15] While the economy has slowed, it will be impossible (apart from consistently and markedly negative [or, in the opposite case, positive] economic data of many different kinds) to determine with certainty if the nation is in a recession before July 2008 when the advance second quarter GDP calculations from the Bureau of Economic Analysis are published, as final counts of 2007 fourth quarter national production showed 0.6% annualized growth in the size of the economy (down from 4.9% annualized growth in the previous quarter). ^[16] is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... 2008 (MMVIII) is the current year, a leap year that started on Tuesday of the Anno Domini (or common era), in accordance to the Gregorian calendar. ... The United States economy has the worlds largest gross domestic product (GDP), $13. ...

Income inequality

Share of pre-tax household income received by the top 1%, top 0.1% and top 0.01%, between 1917 and 2005.^[17][18]

Many economists are critical of the Bush administration's policies and argue that the economy is only benefiting the wealthy, increasing inequality between the top 1% and the rest of society. ^[19] Economists Aviva Aron-Dine and Richard Sherman point to recent data from the Congressional Budget Office (CBO), showing that "the average after-tax income of the richest one percent of households rose from $722,000 in 2003 to $868,000 in 2004, after adjusting for inflation, a one-year increase of nearly $146,000, or 20 percent. This increase was the largest increase in 15 years, measured both in percentage terms and in real dollars."^[20] According to economists Emmanuel Saez and Thomas Piketty, who reviewed income tax returns for all income groups since 1917, found that in 2005, the top 1% received its largest share of gross income since 1928.^[21] Economist John Weeks asserts that increased income inequality in the U.S., one of only four high-income OECD countries to experience a significant increase in inequality, is largely the result of a less progressive taxation structure, the weakening strength of labor unions, which has resulted in "a growing imbalance in the economic and political power of capital and labor."^[22] The Congressional Budget Office is a federal agency within the legislative branch of the United States government. ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...

While the vast majority of economists believe that inequality has increased sharply since the late 1970 and during the tenure of George W. Bush, conservative and libertarian economists have attempted to refute claims of increasing inequality by pointing to flaws in the data gather of Thomas and Piketty. Economist Stephen Rose asserts that Piketty and Saez use an older method to adjusting for inflation, exclude government transfers, and they do not address demographic changes. Rose does, however, conclude that while inequality did increase, the increase has been exaggerated.^[23] Libertarian economist Alan Reynolds, senior fellow at the Cato Institute, makes similar assertions as Rose^[24] Gary Burtless, senior fellow at the centrist Brookings Institution, however, stated that Reynolds did not provide sufficient evidence to dismiss the findings of Saez, which are further supported by the CBO. According to him, "many of [Reynold's] criticisms are misguided or unfair given the goals of the Pikkety-Saez project... The CBO handles almost all the problems Reynolds mentions, and its calculations show a sizeable rise in both pre-tax and after-tax inequality since the late 1980s."^[25] Overall the vast majority of economists disagree with Reynolds, believing that income inequality has grown and government redistribution is required to lessen the current extent of inequality, which they view as excessive.^[26][27] See also Libertarianism and Libertarian Party Libertarian,is a term for person who has made a conscious and principled commitment, evidenced by a statement or Pledge, to forswear violating others rights and usually living in voluntary communities: thus in law no longer subject to government supervision. ... The Cato Institute is a libertarian think tank headquartered in Washington, D.C. The Institutes stated mission is to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets, and peace by striving to achieve greater involvement... In politics, centrism usually refers to the political ideal of promoting moderate policies which land in the middle ground between different political extremes. ... The Brookings Institution is a United States nonprofit public policy think tank based in Washington, D.C.. Described in 1977, by TIME magazine as as the nations pre-eminent liberal think tank,[1] the institution is devoted to public service through research and education in the social sciences, particularly...

Tax cuts

Between 2001 and 2003, the Bush administration instituted a federal tax cut for all taxpayers. Among other changes, the lowest income tax rate was lowered from 15% to 10%, the 27% rate went to 25%, the 30% rate went to 28%, the 35% rate went to 33%, and the top marginal tax rate went from 39.6% to 35%^[28]. In addition, the child tax credit went from $500 to $1000, and the "marriage penalty" was reduced. The marriage penalty in the United States refers to the higher taxes required from some married couples, where spouses are making approximately the same taxable income, filing one tax return (married filing jointly) than for the same two people filing two separate tax returns (as single, not married filing separately...

Some policy analysts and non-profit groups such as OMBWatch^[29], Center on Budget and Policy Priorities[1], and the Tax Policy Center^[30] have attributed some of the rise in income inequality to the Bush administration's tax policy. In February of 2007, President Bush addressed the rise of inequality for the first time, saying "The reason is clear: We have an economy that increasingly rewards education and skills because of that education"^[31]. The tax cuts have been largely opposed by American economists, including the Bush administration's own Economic Advisement Council.^[8] In 2003, 450 economists, including ten Nobel Prize laureate, signed the Economists' statement opposing the Bush tax cuts, sent to President Bush stating that "these tax cuts will worsen the long-term budget outlook... will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research... [and] generate further inequalities in after-tax income."^[2] The Bush administration has claimed, based on the concept of the Laffer Curve, that the tax cuts actually paid for the themselves by generating enough extra revenue from additional economic growth to offset the lower taxation rates. In contrast to the claims made by Bush, Cheney, and Republican presidential primary candidates such as Rudy Giuliani, there is a broad consensus among even conservative economists (including current and former top economists of the Bush Administration such as Greg Mankiw) that the tax cuts have had a substantial net negative impact on revenues (i.e., revenues would have been substantially higher if the tax cuts had not taken place), even taking into account any stimulative effect the tax cuts may have had and any resulting revenue feedback effects.^[32] When asked whether the Bush tax cuts had generated more revenue, Laffer stated that he did not know. However, he did say that the tax cuts were "what was right," because after the September 11 attacks and threats of recession, Bush "needed to stimulate the economy and spend for defense."^[33] The Center on Budget and Policy Priorities (CBPP) describes itself as a policy organization . ... The Tax Policy Center (TPC) provides timely, accessible analysis and facts about tax policy to policymakers, journalists, citizens, and researchers. ... This article does not cite any references or sources. ... Rudolph William Louis Giuliani III, (born May 28, 1944) is an American lawyer, prosecutor, businessman, and Republican politician from the state of New York. ... N. Gregory Mankiw Nicholas Gregory Mankiw (born February 3, 1958) is a macroeconomist. ...

In terms of increasing inequality, the effect of Bush's tax cuts on the upper, middle and lower class is contentious. Most economists argue that the cuts have benefited the nation's richest households at the expense of the middle and lower class,^[34] while libertarians and conservatives^[35] have claimed that tax cuts have benefitted all taxpayers.^[36] Economists Peter Orzsag and William Gale described the Bush tax cuts as reverse government redistribution of wealth, "[shifting] the burden of taxation away from upper-income, capital-owning households and toward the wage-earning households of the lower and middle classes."^[37] Between 2003 and 2004, following the 2003 tax cuts, the share of after-tax income going to the top 1% rose from 12.2 percent in 2003 to 14.0 percent in 2004. (This followed the period from 2000 to 2002, where after-tax incomes declined the most for the top 1%.)^[20] As the income of the top 1% rose considerably faster than that of the bottom 99%, the share of overall tax liabilities of the top 1% still increased from 22.9% to 25.3%, despite the cuts.^[38] Research by economist Aviva Aron-Dine concluded that despite conservative claims to the contrary, "The claim that the tax cuts are fairly distributed and have made the tax code more progressive does not withstand scrutiny." She finds that the effective federal tax rate for the top 1% dropped by 4.8%, compared to 2% for the middle income quintile and 1.9%, respectively, while the after-tax income rose much faster for the top 1% than any other demographic as a result of the cuts, making them regressive.^[39] Conservatism in the United States comprises a constellation of political ideologies including fiscal conservatism, free market or economic liberalism, social conservatism,[1] bioconservatism and religious conservatism,[2][3] as well as support for a strong military,[4] small government and promotion of states rights. ...

Federal Budget Deficit

Breakdown of debt incurred between 2001 and 2006.^[40]

The On-Budget surplus in 2000 was $86 billion. A combination of tax cuts and spending initiatives has added over $2.3 trillion to the national debt since then. The annual On-Budget deficit for 2006 was $434 billion.^[41] Most debt was accumulated as a result of tax cuts and increased national security spending. According to economists Richard Kogan and Matt Fiedler, "the largest costs — $1.2 trillion over six years — resulted from the tax cuts enacted since the start of 2001. Increased spending for defense, international affairs, and homeland security — primarily for prosecuting the wars in Iraq and Afghanistan — also was quite costly, amounting to almost $800 billion to date. Together, tax cuts and the spending increases for these security programs account for 84 percent of the increases in debt racked up by Congress and the President over this period."^[40]

Trade policy

The Bush administration has generally pursued free trade policies. Bush used the authority he gained from the Trade Act of 2002 to push through bilateral trade agreements with several countries. Bush has also sought to expand mulilateral trade agreements through the World Trade Organization, but negotiations have been hung up in the Doha Development Round for most of Bush's presidency. Developing countries blame the US and the EU for stagnated negotiations since both maintain protectionist policies in agriculture. While generally favoring free trade, Bush has also occasionally has supported protectionist measures, notably the 2002 United States steel tariff early in his term. Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... The Trade Act of 2002 (HR 3009; also called the ) grants the President of the United States the authority to negotiate trade deals with other countries and only gives Congress the approval to vote up or down on the agreement, but not to amend it. ... WTO redirects here. ... According to developing nations such as India and Brazil, the deal presented by the U.S. and E.U. would have been devastating for their agricultural industry. ... Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. ... The Section 201 steel tariff is a political issue in the United States regarding a tariff that President George W. Bush placed on imported steel on March 5, 2002 (took effect March 20). ...

George W. Bush successfully gained ratification of the Dominican Republic–Central America Free Trade Agreement(DR-CAFTA). Supporters of DR-CAFTA claim it has been a success[2], but detractors still oppose the agreement for a variety of reasons including its impact on the environment.[3] Presidents Francisco Flores Pérez (former), Ricardo Maduro (former), George W. Bush, Abel Pacheco (former), Enrique Bolaños (former) and Alfonso Portillo (former) The Dominican Republic–Central America Free Trade Agreement, commonly called DR-CAFTA, is a free trade agreement (legally a treaty under international law, but not under US...

References