In Midwest, Bush Preaches Economy

President Bush on Wednesday blamed the nation’s economic woes on three factors beyond his control: a recession he inherited, the Sept. 11 attacks and corporate “liars” whose scandals have shaken confidence in the economy.

As the president began a two-day visit to politically important Midwestern states and his Treasury secretary traveled to the West Coast, the Bush administration fired its first shots in a political season that is growing ever more intense. The goal is to protect Republicans running in November’s congressional and gubernatorial elections from the challenges created by economic uncertainty.

One day after his carefully scripted economic forum in Waco, Texas, Bush left his ranch to present himself in Wisconsin and Iowa as a president aware of the nation’s anxieties and confident that the fundamentals of the economy are sound. He also helped two Republican gubernatorial candidates, incumbent Scott McCallum in Wisconsin and challenger Doug Gross in Iowa, raise nearly $2 million.

For Bush, each day this summer seems to put his father’s political fate--and his own desire to avoid it--into sharper focus. After seeing his popularity soar after the Persian Gulf War, the elder Bush lost the presidency in 1992 during a period of economic turmoil.

Indeed, the younger Bush equated his efforts on behalf of the economy with the war on terrorism Wednesday, saying, “We will do whatever it takes to protect the homeland and ... we will do whatever it takes to make sure our economy remains strong and vibrant throughout the United States of America.”

And much like his father’s efforts to present a picture of concern and optimism, Bush told visitors to the Iowa State Fair: “We may have hit a bump in the road. That road is going to smooth out.... I’m optimistic about the economic security of America.”

Treasury Secretary Paul H. O’Neill presented a similar message on the West Coast, telling audiences in Seattle and Portland, Ore., that there are “bright spots” in the economy that herald better days ahead.

“To a lot of folks out there, it doesn’t feel like a recovery yet. But the economists who study the numbers all say the recovery is underway,” O’Neill told members of the Portland Business Alliance. He cited low inflation and interest rates, rising productivity and profits, and a booming housing market as evidence of economic strength.

O’Neill said last year’s recession was inevitable when Bush got to Washington, and would have been deeper and longer if not for the president’s $1.35-trillion tax cut.

The states the president is visiting this summer have particular political significance. In 2000, he lost Iowa to Al Gore by three-tenths of a percentage point, and he lost Wisconsin by two-tenths of a point. Since taking office, he has visited each state seven times. Next week, he will be on the West Coast, with stops in California.

Shedding his suit jacket under the searing Iowa sun, Bush appeared before the crowd in a white shirt and red tie.

Soon afterward, Sen. Joseph I. Lieberman of Connecticut, Gore’s running mate in 2000 and a potential Democratic presidential candidate in 2004, worked the crowd near a display of vintage tractors.

“The economy’s in trouble and this administration has not had an economic growth strategy,” he told reporters. Lieberman said the economic summit--which he said “sounded less like a summit and more like a valley”--offered no new suggestions and was, rather, “a stage for replaying the old ideas--and they haven’t worked.”

Bush stood before a backdrop of tractors--four red McCormicks and four green-and-yellow John Deere models--and bales of hay that created an image of rural prosperity.

But Bush also used the tractors as a visual reminder of one of the more contentious positions he has taken in recent weeks: his signing last week of legislation giving him authority to make international trade agreements. It has left some, particularly union activists, uneasy that lowered trade barriers will send U.S. jobs overseas.

The president said that for every four tractors John Deere builds in Waterloo, Iowa, one is sold in foreign markets. His point: Lowered tariffs bring greater sales of U.S.-made goods to distant consumers, and thus more jobs at home.

He also defended his opposition to a congressional appropriation of $5.1 billion, of which he said $100 million would be spent on fighting terrorism and other programs he favors, while $5 billion would go to projects he said the nation cannot afford.

During both stops--at the state fair here and at a rally in a University of Wisconsin gymnasium in Milwaukee--Bush sought to put into perspective the economic challenges the nation is facing, ending with corporate accounting corruption that has shaken investors’ confidence in the stock markets.

“I mean, after all, for the first three quarters when I was the president, we were in recession. And then, that--Sept.--11 hit. And that hurt our economy,” he said in Milwaukee. “And then, some of these liars showed up, some of these scandals started to surface. They’ve been in the making for a while, but they began to bubble up. And that shook the confidence of our country.”

His remarks came on the day that corporate CEOs and chief financial officers were required to certify the accuracy of their financial reports with the Securities and Exchange Commission.

The Treasury secretary also did not comment directly about the SEC deadline. But he promised that in cases where corporate executives are found to have knowingly cooked the books, the administration would “punish these people and put them in jail.”

O’Neill, who received more than $100 million in compensation and stock option profits as CEO of Alcoa, said he “was amazed to find out there were CEOs who didn’t think about their job the way I thought about my job,” and who abused the trust placed in them by shareholders and employees.

“When I was at Alcoa,” he said, “I thought all of the people who worked there were like my family.”

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Gerstenzang reported from Des Moines and Vieth from Portland, Ore.