INDIANAPOLIS, 7 September 2003 — US President George W. Bush on Friday confronted increasing Democratic criticism and a disappointing new government jobs report by insisting that the failure of the employment picture to brighten in an otherwise improving economy was temporary.
“We’ve got a short-term problem,” Bush said. But he added that the long-term prognosis for more US jobs was good under his tax cut and other economic stimulus proposals.
It came as Democrats stepped up their criticism for his handling of both the economy and postwar Iraq. Bush planned to address the nation Sunday night on Iraq, spokesman Scott McClellan said. Bush conceded that his tax cuts might be responsible for a quarter of the nation’s record budget deficit.
He blamed some of the job losses on the increased productivity of American workers, and said jobs were often among the last things to rebound in an economic downturn.
“There are a lot of Americans looking for work, and we have to do something about that in Washington, D.C.,” Bush told employees of a freight distribution company here on his third speech this week focusing on his economic record.
As Bush spoke, a crowd of 75 demonstrators outside of the fund-raiser chanted, “No more Bush, no more lies, working people sympathize.” Bush made his speech a few hours after a Labor Department report showed that, while the overall unemployment rate in August dropped from 6.2 percent to 6.1 percent, the economy lost 93,000 jobs, the seventh consecutive month of declines.
The continuing job loss, despite two major Bush-sponsored tax cuts and 13 Federal Reserve interest-rate cuts, has become a major political liability for Bush and Republicans.
In the first major debate among Democratic presidential contenders on Thursday night, Bush’s handling of the economy was a prominent target, with Democrats ganging up to blast his tax cut and other policies. Democrats emphasize that nearly 3 million jobs were lost since Bush took office.
“Today’s (unemployment) report shows we’ve got more to do, and I’m not going to be satisfied until every American who’s looking for a job can find a job,” Bush pledged. Bush noted that many economists consider unemployment reports “a lagging indicator,” and that job growth after a recession often is “the last thing to arrive on the scene.”
In a detailed attempt to explain why his tax cuts had not yet spurred job growth, the president suggested that would-be gains in employment were being offset by a recent surge in worker productivity.
Some of that increase in productivity came because employers reduced the number of their work force, Bush said. “In order for job creation to grow, the economy must grow faster than productivity gains,” he said.
“Long term is good that we’re more productive. It means higher wages for the American worker. It means we’re more competitive overseas.”
“Short term,” he added, “this economy needs to crank up faster than productivity increases in order for somebody to find a job.” Bush also defended the rising budget deficit, saying half of it was due to “the recession that we’re trying to get out of.” Bush said that a quarter of the remaining deficit was caused by his tax cuts and the other quarter by spending “to defend America,” including Iraq-related costs.
The Congressional Budget Office recently said the budget deficit would swell to $480 billion next year, and that the budget would continue in the red for most of the next 10 years.
Bush’s trip here completed a trio of Midwest speeches on the economy and opened a fresh round of fund raising to bolster his re-election bank account.
He was attending a fund-raiser Friday night that was expected to inject another $1.5 million into a war chest already worth at least $56 million for next year’s primary, though he faces no Republican opponent.
