Bush Encourages Nation Along ‘Path to Prosperity’

Striking a strongly upbeat note, President Bush said Thursday that America is emerging from its economic troubles, and he vowed to continue pursuing a “jobs and growth” agenda that would keep the country “on the path to prosperity.”

“We are emerging from a period of national challenge and economic uncertainty,” he said. “The hard work of our people and the good policies of our government are paying off. Our economy is starting to grow again.”

Bush’s speech -- among his most comprehensive on the economy and his handling of it -- marked a shift in emphasis. In his remarks to several thousand chamber of commerce members, he portrayed himself as an effective steward of the economy, claiming credit for the recovery many believe is underway.

His unusually lengthy remarks also provided the contours of the economic message he can be expected to dwell on during his reelection campaign.

While focusing on the future, Bush sought to shield himself from the economy’s anemic performance during his presidency -- including the loss of about 3 million jobs. The Democrats seeking to replace him in next year’s election repeatedly have spotlighted the job losses.

Bush blamed the economic ills on what he characterized as an unprecedented confluence of factors beyond his control -- the Sept. 11 terrorist attacks and a series of corporate accounting scandals, both preceded by a slowdown he said was taking hold before he assumed office.

Economists date the recession to March 2001, and say it ended that November. Bush, however, is aware that growth since then has been mostly sluggish, that polls show Americans remain uneasy about the economy and that the job-loss figure will require explanation.

Bush said that typically, a downturn in the economy results from “single, unexpected shocks, such as spikes in energy prices or sudden shifts in markets.”

But he said that since 2000, “our economy has been dealt not just one shock, but three -- a set of challenges with few parallels in American history.”

The problems began, he said, when the stock market “began a steady decline in March 2000, as investors realized that the economy was not healthy.”

Turning to the 2001 terrorist attacks, Bush estimated their economic impact at $80 billion -- “nearly equivalent to wiping out the entire economy of Kansas for one year,” he said.

The wave of corporate scandals, he said, “erased savings of [some] Americans ... it forced the layoffs of thousands and it undermined the confidence of investors.”

Many analysts say that Bush’s prospects for persuading voters not to blame him for the nation’s economic struggles remain in doubt.

“It’s going to be more difficult to do if and when he has an effective [Democratic] opponent saying no, you’re to blame,” said public opinion analyst Andrew Kohut, director of the Pew Research Center for the People and the Press.

Since the Sept. 11 attacks, he said, the president essentially has occupied a national soapbox without challenge. But once a likely Democratic presidential nominee emerges, Bush’s ability to sell his message will not go unhampered.

“By spring, there’s going to be some Democrat saying: ‘The real reason is this,’ and those reasons are going to be critical of Bush,” Kohut said.

Rep. Kenny C. Hulshof (R-Mo.) endorsed Bush’s explanations but conceded that the electorate might not give the president a pass come election day if the improvements he pointed to have not panned out.

“All the things that the president says are true, but the very candid and frank answer is: I truly believe that Americans vote their pocketbooks,” Hulshof said.

Bush took note of the growing federal budget deficit -- recently projected to reach $480 billion in 2004 -- but he attributed it largely to lost tax revenue because of the recession and the spending for the war against terrorism.

Bush acknowledged that the sweeping tax cuts he pushed into law were responsible for a portion of the deficit. But he argued that by spurring economic growth, in the long term they would generate far more in tax revenue to the federal treasury. He also asserted that the tax cuts averted an even deeper recession and prevented as many as 1.5 million additional workers from losing their jobs.

The president devoted much of his address to a panoply of positive economic signs, such as the continuing strength of the housing market and improvements in the stock market.

He said these and other developments showed that his policies were “paying off,” and he called on Congress to pass other White House initiatives designed to speed a recovery.

These include curbing the rising cost of health care, adopting an energy policy that would increase domestic production of oil and gas, reducing government regulations, expanding free trade and, above all, making his tax cuts permanent.

By embracing his prescriptions, Bush said in his speech at the Kansas City Convention Center, Congress could turn the “hopeful signs” into “lasting growth and greater prosperity and more jobs.”

Bush stressed his concern for the unemployed. “Even as this economy is looking up, it’s hard to feel confidence if you’re someone looking for a job,” he said. “Parts of this country are not doing as well as they should -- regions like the Pacific Northwest and parts of the Midwest.”

On Monday, in a speech in Ohio, Bush announced the creation of a top post in the Commerce Department to combat the loss of manufacturing jobs. In his Thursday speech, Bush asked for patience in the effort to decrease unemployment. “Usually when the economy comes out of a recession, jobs are the last thing to arrive,” he said.

He portrayed increases in worker productivity as part of the reason for lagging employment. While greater productivity leads to higher wages, he said, it has “a downside” in the short term. “When a business can produce more per employee ... it does not hire new people right away to meet rising demand.”

Bush was most ardent when he defended his tax cuts, which Democrats have blamed for diverting money from pressing needs such as education and health care.

“Tax relief came at the exact right time,” Bush said. The cuts were key to making the recession “one of the shallowest in modern economic history.”

The tax cuts are due to phase out during the next decade, and Bush pressed his call for Congress to make them permanent.

“When we threw out the old taxes, Americans didn’t expect to see them sneaking in through the back door,” he said. “For the sake of economic growth, for the sake of job creation, the United States Congress must make these tax cuts permanent.”

With the campaign pace quickening among the Democrats, Bush is stepping up his travels and fund-raising. He is to deliver another speech on the economy today in Indianapolis before attending a fund-raiser for his reelection bid. Next week, he is scheduled to travel to Tennessee and Florida.