Bush, aides plan action on economy President acknowledges 'all is not well,' seeks jobless bill compromise

October 05, 1991|By Karen Hosler | Karen Hosler,Washington Bureau of The Sun

WASHINGTON -- Senior Bush advisers are working determinedly to present the president with a wide range of steps he might take to bolster a troubled economy that threatens to linger well into his prospective campaign for re-election.

Mr. Bush -- who acknowledged yesterday that "all is not well" with the economy, given the sluggish pace of growth since the recession reportedly ended in June -- asked for the proposals last week at the first of a hectic round of meetings involving his key economic advisers.

The talks have taken into consideration legislative and political strategy as well as economic policy, according to participants.

"There is definitely increased concern about the economy, particularly by the president, who raised the issue of whether he hadn't done as much as he could have," one senior administration official said.

Mr. Bush seized on new figures showing a slight drop in the unemployment rate to declare at a news conference yesterday that "the economy is moving in the right direction" despite the unexpectedly flat growth rate.

But he also said that he was "deeply concerned" about those who have lost their jobs, and he said for the first time that he was eager to sign a bill that would extend unemployment benefits.

His comments reflected the arguments of some political advisers, including Vice President Dan Quayle, who say the president needs to take a more aggressive approach to dealing with the continuing effects of the recession.

"Especially as you approach an election, it's important for voters to see that at least you tried," an official said.

Mr. Bush reiterated, however, that he would not sign a bill to aid the jobless such as the $6.4 billion measure sent to him this week by the Democratic-led Congress because it would break the budget ceiling.

"When people are still hurting, I want to do what I can to help," he said. "But it doesn't help to simply add more to an already intolerable deficit."

Even as he was preparing to veto the Democratic bill, Mr. Bush urged the millions of unemployed workers whose 26 weeks of jobless benefits are about to expire to "demand of their Congress to pass a bill that the president can sign."

Mr. Bush said he would sign "immediately" a measure offered by Senate Minority Leader Bob Dole, R-Kan., that would provide only 10 weeks of extended benefits -- half the Democratic proposal -- but would pay for the benefits by auctioning federal broadcasting frequencies.

He called it "a bill that we've been for for some time," although until recently the administration had argued that a benefits extension was unnecessary because the recession was over.

The president's session with reporters yesterday came in the midst of a White House debate still said to be far from conclusive. Talks were expected to continue next week with a Cabinet meeting Monday and another session of Mr. Bush's Economic Policy Council Tuesday.

Treasury Secretary Nicholas F. Brady is already moving at Mr. Bush's direction to ease the "regulatory excess" that the president believes is inhibiting lenders and contributing to the so-called "credit crunch" crippling small businesses.

Michael J. Boskin, chairman of the president's Council of Economic Advisers, and other officials have also been pushing hard to get the Federal Reserve Board to cut interest rates further to encourage greater economic growth.

Some advisers, including Mr. Quayle, would like to see the president offer a new or at least repackaged legislative initiative that would include a mixture of components to stimulate long-term growth and create jobs while providing short-term relief for those particularly hurt by the recession.

Such a proposal had been under consideration for the president's State of the Union address in January. But alarm at the slower-than-expected recovery at the same time the Democrats are making political hay out of passing a jobless bill they know Mr. Bush will veto has prompted some advisers to suggest that the timetable be accelerated.

The president sidestepped a question yesterday about whether he was considering strong remedial action to jump-start the economy. He added, though, that he "would like to see something done in the way of a growth package" based on a cut in the capital gains tax rate that he has been promoting off and on since the beginning of his term.

Officials said other options include investment tax credits, larger tax breaks for individual retirement accounts and a more radical plan to cut the Social Security payroll tax that the administration has consistently opposed.

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