U.S. Still in Recession, White House Concedes

The White House retreated Tuesday from its past pattern of upbeat assertions that the nation’s economy is on the rebound and acknowledged that the country remains mired in recession.

“You can get an argument from the economists about the numbers but, certainly from any practical standpoint, the recession does continue,” White House Press Secretary Marlin Fitzwater said.

His blunt statement came after President Bush and his aides had insisted for weeks that the recession had ended and that recovery, although sluggish, had begun. It reflected a new wave of pessimism tied to recent economic reports, as well as fresh survey results showing Bush’s sagging popularity and widespread dissatisfaction with his handling of the economy.

The White House also stepped back from its traditional insistence that it pays little attention to opinion polls. Fitzwater said that the latest economic soundings, contained in a Washington Post-ABC News survey published Tuesday, will be considered “very seriously” by the White House.

“When the economy is in this kind of trouble, people have a right to be concerned,” he said. “When people are expressing this kind of concern, that’s a very serious problem.”

In the new poll, 47% of those surveyed approved of Bush’s overall job performance--slipping below 50% for the first time in any Post-ABC survey, although other national polls have shown similar declines.

In a finding considered even more ominous by the President’s aides, only 24% approved of Bush’s handling of the economy, while 70% disapproved.

Fitzwater said that private polls carried out for the White House have found similar sentiments.

White House officials said that the sudden candor had been prompted in large part by new Chief of Staff Samuel K. Skinner, who warned that efforts to present economic news in a positive light had created a perception of an insensitive, uncaring President.

Skinner, who took office this week, conceded in a meeting with reporters on Tuesday: “We have a communications problem.”

“We have not communicated, somehow, what (the President) has been doing and spending his time on,” Skinner said, contending that Bush has devoted considerable time to domestic issues but that the message has not reached the public.

Indeed, after months of focusing almost exclusively on foreign affairs, economic concerns enter into nearly every public step the President now takes.

This morning, Bush is flying to Dallas to sign the $151-billion transportation bill recently passed by Congress in a ceremony designed to draw attention to the measure’s job-creating aspects. The backdrop will be a highway construction project.

Similarly, the White House says that trade concerns will be the central element in Bush’s four-nation Asian tour that begins at the end of the month, as the President seeks in a public way to associate foreign policy with domestic political concerns.

Meanwhile, Bush drew fire Tuesday from the Democratic National Committee, which said that the nation’s bank failures, shrunken job market and the economic downturn “are beginning to conjure up images of the 1932 Great Depression.”

He also was assailed by columnist Patrick J. Buchanan, who is challenging him for the Republican presidential nomination. Buchanan said that Bush assembled a program of economic aid for the Soviet Union in five days “and can’t put together a program for his own country in five months.”

“That’s why he’s got trouble,” Buchanan said at a press conference, urging Bush to press Congress to enact tax cuts for middle-income Americans and to reduce the tax on capital gains.

On another issue, Buchanan complained about being barred from the ballot in the South Dakota primary on Feb. 25, one week after the New Hampshire primary. State party officials have said that Buchanan failed to comply with their delegate selection rules.

Buchanan, however, declared: “Leaders of the Republican Party are beginning to treat me like David Duke.” Duke is the former Ku Klux Klan leader who also is seeking the GOP presidential nomination. He, too, is having trouble getting on the ballot in some states.

Fitzwater said that Bush plans to campaign in New Hampshire--a state where, in less challenging times, he could have expected to breeze to victory in the Republican primary. First Lady Barbara Bush plans to file the necessary documents today to have his name placed on the ballot.

In describing the change in the White House approach to the recession and its political impact, Fitzwater said: “The first step is to let the country know we understand the depth of the problem and are not trying to sugarcoat it in any way.”

While clearly stating that the nation is in recession, Fitzwater said that the White House has no specific economic figures to indicate that--after slight growth during the third quarter--an economic contraction will be recorded during the final three months of the year.

And Bush, in an interview with WPVI-TV in Philadelphia, said: “I am less interested in what the technical definition is. You might argue, technically, are we in recession or not. But when there’s this kind of sluggishness and concern, definitions--heck with it. Let’s get on with the business at hand.”

Fitzwater said that his stark description of a “recession,” besides reflecting Skinner’s influence, also was motivated by what he called “very sobering” words from Federal Reserve Board Chairman Alan Greenspan. The Fed chairman has said that he no longer believes that interest rate reductions alone can produce a recovery.

A White House official, speaking on condition of anonymity, said that among steps the Administration is considering as it prepares an economic growth package is a onetime, election-year rebate of as much as $300 per taxpayer.

The White House has been under pressure to include a reduction for middle-income taxpayers as one way to invigorate the sagging economy. The plan was proposed by Senate Minority Leader Bob Dole (R-Kan.) in a meeting with Bush last week.

The question raised by all proposals for tax cuts or rebates is how the government will make up the lost revenue. The Dole proposal would deprive the government of about $23 billion in revenue.

With the plunging opinion polls seeming to repudiate the determined White House optimism about the economy, Fitzwater said that he and other senior advisers see little choice but to embrace the other extreme.

“You’ve got to accept the depth of the problem in order to make them understand that you’re working on the problem,” the White House spokesman said.

In his own meeting with reporters, Skinner made clear that he is ready to advocate change not only in communications strategy but in other areas as well, if it is necessary.

“I am looking at process and trying to find ways to improve it,” said Skinner, noting that his experience as an IBM salesman in the 1960s had transformed him into “a process kind of guy.”

Other White House officials said that Skinner had ordered most senior staffers to set aside holiday vacation plans and to be prepared to work virtually every day but Christmas and New Year’s between now and next month’s State of the Union address by the President.

“It’s not going to be a good time for anyone to take off,” one White House official said. For his part, Skinner noted that he had been so eager to get to work on his first day on the job Monday that he decided not to wait for a government limousine and drove himself to the office, arriving at 5:45 a.m.

By the time Bush reached the Oval Office, the new staff chief had been at work for an hour, Skinner said.

“He was dogging it,” Skinner jested of his new boss.

Times political writer Robert Shogan contributed to this story.