Economic Summit Promotes Bush's Agenda

Times Staff Writers

WASHINGTON — It was part economic talk show, part political tent revival.

The White House pulled out all stops today as it convened a two-day conference to drum up support for restructuring Social Security, overhauling the tax code, curbing "lawsuit abuse" and enacting President Bush's other second term priorities.

Vice President Dick Cheney welcomed the participants and then sat almost wordlessly through a panel discussion on "The State of Our Economy."

President Bush came too, and participated in an hourlong session on "The High Cost of Lawsuit Abuse" and tort reform.

Treasury Secretary John Snow dangled the prospect of more tax cuts. Health and Human Services Secretary Tommy Thompson bemoaned the high cost of medical care.

One after another, a handpicked collection of economists, experts and business executives served up an unrelenting and unstinting series of testimonials to the wisdom of the president's economic priorities. To a person, they urged the administration to do more of the same.

"Thank God the election is over," effused Mary Farrell, managing director of UBS Wealth Management of New York. "I have never seen so much economic misinformation and illiteracy out there in the marketplace. We have a wonderful economy."

One thing it was not was a frank exchange of competing ideas.

In the opening day sessions, there was nary a hint of criticism of Bush's across-the-board tax reductions, which have contributed to widening budget deficits, or his plans to create private accounts in Social Security, which some analysts fear would weaken the public retirement program.

What passed for an off-message moment came during the litigation panel, when Yale law professor George Priest described as "small steps" the president's goal of curbing asbestos litigation, combating class-action lawsuits, and capping financial awards to consumers injured in medical malpractice cases.

A short time later, Bush chose different words, saying that his plan amounted to "a huge step."

And so it went.

In denouncing what he regularly derides as "frivolous and junk lawsuits," Bush used some of his strongest language in making his case for change, saying: "We cannot have the legal system to be a legal lottery.

"First of all, justice ought to be fair ... those who have been hurt ought to have their day in court," he told several hundred people in a small auditorium in the Ronald Reagan Center several blocks from the White House.

"But a judicial system run amok is one that makes it really hard for small businesses to stay in business," Bush added.

"If we can achieve legal reform in America, it will make it a better place for people to either start a business and, or find work," Bush said.

The cost of litigation, he added, was making it more difficult to compete against other countries economically.

Bush said that when he took office, he viewed tort reform as a prerogative for states — until he saw how widespread the practice of defensive medicine was.

"There is a direct cost to the taxpayers. It's a quantifiable number; it's a lot at $27 billion a year. And so I decided it's a national issue that requires a national solution," he said.

Priest delivered a brief history of tort law, which he acknowledged has produced "some benefits," such as safer consumer products. But he contended that trial lawyers have so exploited the system that they have turned the decades of litigation over asbestos exposure into "a vast system of redistribution" that benefits the lawyers rather than providing compensation to those injured by the fire retardant.

According to the panel's moderator, Commerce Secretary Don Evans, "junk and frivolous" lawsuits account for 2% of the GDP, or about $250 billion a year.

Critics of the president's proposals have argued that the cost of such lawsuits are considerably less than claimed by the administration — and that by definition, the "frivolous" suits rarely make it to court.

Among those who helped Bush and Evans make the case for tort reform was Bob Nardelli, chairman of Home Depot, a big Bush-Cheney campaign fundraiser who blamed excessive litigation for the loss of U.S. jobs offshore.

"This is about lawyers pushing jobs out of this country," he said.

Earlier, Nardelli described lawsuits against big business as a matter of "deep pockets colliding with shallow principles."

The session is to continue Thursday, focusing on "Financial Challenges for Today and Tomorrow" and "Preparing for the Jobs of the 21st Century." After that, the president is scheduled to make closing remarks.

Today's other panels focused on "Tax and Regulatory Burdens" and "Making Healthcare More Affordable."

During the health panel, participants touted health savings accounts, a Bush initiative that would allow individuals to set aside pretax dollars to purchase high-deductible catastrophic health insurance plans.

The lack of any diversity of views was not surprising.

Afterward, Todd A. Smith, president of the American Association of Trial Lawyers, issued a sharp dissent.

"President Bush's economic plan pretends that taking away the legal rights of American families will reduce healthcare costs," he said in a statement. "That's not an economic plan. It is yet another give-away to the insurance, drug, HMO and nursing home industries."

But a top White House official disagreed.

"Today we heard the issues well articulated by different experts. They highlighted the challenges ahead and what we have to do," said Suzy DeFrancis, deputy White House communications director. "And as we heard this morning, we have a strong economy and that affords us the ability to take on the challenges the president has outlined."

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