HAVANA, Cuba (Reuters) --Communist-run Cuba reacted angrily on Friday to a report
the Bush administration was considering suspending family remittances by
Cuban-Americans and said its socialist economy would survive the blow.

The cash remittances from relatives in the United States, now estimated to total
as much as $1 billion a year, are a vital source of income for many Cubans
coping with economic hardship in Cuba since the collapse of the Soviet Union.

The New York Times reported on Thursday the Bush administration was
studying a series of steps to punish the Cuban government for a recent
crackdown on dissidents.

"More than four decades of revolution have demonstrated that are country is
capable of facing any threat and defeating sinister plans of all kinds," a Cuban
government statement said.

"The punished will be many families ... and, what is worse, many elderly people
who depend on theses remittances," said the statement, published on the front
page of the Communist Party daily newspaper Granma.

But in Washington, U.S. officials said they may consider new steps to pressure
Cuba over the crackdown, but so far discussions of specifics were at a low
level of government.

A lobbyist on the issue meanwhile said that interest groups have given the
administration proposals for punitive measures such as bans on remittances and
direct travel to Cuba, while others have recommended stepped-up efforts to
promote democracy by providing items such as fax machines to dissidents and
beefing up U.S. broadcasts to Cuba.

The Cuban statement, which local analysts thought was penned by President
Fidel Castro himself, said the dollar remittances went a long way in Cuba
because the socialist state subsidizes food and rent, and education and health
care are free.

"The Cuban economy and its social services can survive the suspension of the
alleged grand benefits of those remittances," it said.

One dollar bought 6.6 gallons (25 liters) of subsidized milk in Cuba, where
entertainment is almost free and ticket to a baseball game cost 500 times less
than in the United States, the statement said.

Dissident roundup

In the last month, Cuba has rounded up 75 dissidents and imprisoned them for
terms of up to 28 years in a move to stamp out pro-democratic opposition to
Castro's one-party state, despite widespread international criticism of the
arrests.

Last week, Cuba shocked human rights organizations with the execution by
firing squad of three men who hijacked a Havana Bay ferry in a bid to cross the
Florida Straits to the United States.

It was the worst crackdown in decades under Castro, who has been in power
since a guerrilla revolution in 1959.

The New York Times, citing U.S. officials, said Washington was also
considering halting direct charter flights to Cuba to limit the number of
Americans traveling to the island, as part of a series of sanctions in response to
the wave of repression.

Tens of thousands of Cuban-Americans, mainly from Florida, visit their families
in Cuba each year on charter flights from Miami, New York, Los Angeles and
other cities.

A U.S. official told Reuters, "What I think there is, is people at the working
level looking at the more harsh tactics of the regime and thinking about what
can we do."

"I'm not aware of anything that's put down on paper," he said.

White House spokeswoman Claire Buchan said on Thursday, "We'll continue
to work with independent Cuban civil society and with the Cuban people, and
are willing to consider steps to advance that policy goal in this climate."

The Bush administration has already moved to curb other travel to Cuba by
Americans involved in educational programs, and has vowed to veto a move in
Congress to lift a ban on U.S. tourist travel to Cuba.

Dennis Hays, executive vice president of the anti-Castro Cuban American
National Foundation, said his group would prefer aid to democratic forces over
tougher sanctions. "Our position is the best thing we can do is to strengthen
rather than weaken the independent forces at play inside Cuba -- this is what
Castro fears most and what he has reacted against."

U.S. officials told the New York Times that Bush would not tolerate another
rafter exodus from Cuba, which Castro has allowed in the past to ease pressure
when social unrest rises on the island.

"The alleged measures to be announced prohibiting flights and remittances
would really stimulate illegal migration," the Cuban statement said.

Copyright 2003 Reuters.