President-elect George W Bush said a decision to cut a key interest rate in the US was "not enough" to stimulate growth.
The Federal Open Market Committee has cut the federal funds rate to 6 per cent from 6.5 per cent.
But Mr Bush said his across-the-board tax cut will also be needed to help the economy recovery.
After a closed-door economic forum with prominent businessmen, Mr Bush was asked if the Fed's rate cut would make it harder to gain Congressional support for his $1.3 trillion tax cut.
Mr Bush replied: "Not in the least. I think if you were to talk to business leaders here, they would tell you a rate reduction of one-half per cent is not enough to serve as a stimulus to encourage capital formation, economic growth, job creation.
"It is going to require not only monetary policy reform but also fiscal policy reform," he said.
Mr Bush said his tax cut proposal was "an integral part of economic recovery".
He said the business leaders told him "bad news" about the health of the economy, "that their sales are slowing, they are having to trim back their workforce."
Mr Bush said the FOMC rate cut was a "bold step" and said he planned to "take another bold step to ask Congress to work with us to enact tax reform and tax reductions."
PA