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. Last Updated: 07/27/2016

O'Neill Hits Airwaves to Tout Economy

WASHINGTON -- The Bush administration sent its economic team to the television networks Sunday to make a case for the economy's good health and the soundness of its policies.

Treasury Secretary Paul O'Neill and White House National Economic Council Director Lawrence Lindsey appeared on the ABC, CBS, NBC and Fox networks to say that the economy is fundamentally strong, despite the volatility of the stock market.

O'Neill and Lindsey also defended President George W. Bush's 10-year, $1.35 trillion tax cut against criticism that it has helped return the federal government to deficit spending.

And they made it clear that they oppose one of the most contentious corporate governance proposals still on the table in Washington: a plan to force companies to count as expenses the large number of stock options issued to executives and employees.

The administration's efforts Sunday illustrated the perilous line the White House is walking as fear mounts that the stock market's woes could pull down the rest of the economy. Administration officials hope to overcome investor pessimism and voter gloom by promoting continued economic growth, stable job levels and increasing wages, three positive points that O'Neill referred to on CBS-TV's "Face the Nation" as "a sea of good news."

Administration officials, meanwhile, cannot appear to be dismissing the gravity of economic concerns as voters believed Bush did in the latter part of his administration. An economic forum is scheduled for next month at Crawford, Texas, for the president to hear about economic concerns and express his view of the economy's strengths.

The economic team, in its TV appearances, seemed to favor good cheer over sympathy, although O'Neill and Lindsey did express both. O'Neill predicted economic growth of 3.5 percent this year and a faster growth rate in 2003, while dismissing the importance of the recession from which the economy is emerging.

"If people count as a recession one quarter of negative growth, God bless them. I don't care," he said on NBC-TV's "Meet The Press."

O'Neill and Lindsey also made clear that they would take the cause of corporate governance changes only so far. They praised the tough corporate governance and accounting reform bill that Congress approved last week, saying it was largely what Bush had asked for. Both stood against what some in Congress hope will be the next step -- forcing businesses to subtract from their earnings the fixed-price stock options that executives are issued to buy company stock at steep discounts.

The cause for reform on stock options has been taken up by Federal Reserve Chairman Alan Greenspan, Senator John McCain and investor Warren Buffet as a way to minimize the temptation of corporate executives to artificially increase the value of their companies' stock, then sell their own shares before deep losses are disclosed.

O'Neill said, however, that giving an executive the option to buy stock at a set price, even if the market price is considerably higher, is not a true expense.

"I think there's a time to stand up for what's right," he said on "Fox News Sunday." "And what isn't right shouldn't go down simply because there's a barn fire and everybody's afraid to tell the truth." That position was criticized on the same show by John Bogle, founder of the Vanguard Group of mutual funds. "Absolutely, stock options ought to be expensed," Bogle said. "They are a cost."

O'Neill spent much of his appearances defending himself against charges that he has been too disengaged in the stock market's problems and too blunt to soothe investor nerves. On "Meet The Press" he said: "I would challenge the notion that when the markets are doing their thing, which they do on a regular basis, that someone can say some words that will somehow be a magic elixir."