Bush insists outlook strong

President outlines steps to improve economy hurt by recession, scandal, 9/11

$5.1 billion from Congress killed

Democrats criticize administration's policies

August 14, 2002|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - President Bush took to the national stage yesterday proclaiming confidence in the face of America's economic woes, using a televised forum in Waco, Texas, to show his concern about the economy and his determination to fix it.

"Our economy has strengths that are greater than the challenges," Bush said at a gathering that capped a half-day of panel discussions. The forum brought about 240 hand-picked participants to the campus of Baylor University, just 25 miles from Bush's ranch in Crawford, where he is spending the month.

The meeting was held amid continued stock market shakiness and as Democrats, who dismissed the event as a publicity stunt, intensified their criticism of the Bush administration for what they say are stale economic policies that have contributed to the nation's woes.

In the only new development to come out of the meeting, televised on C-SPAN, Bush announced that he would not spend $5.1 billion that Congress approved as part of a $28.9 billion midyear spending law for defense and homeland security.

"If the Congress won't show spending restraint, I intend to enforce spending restraint," Bush said to applause.

The announcement riled congressional Democrats, and left unfunded several bipartisan priorities. Included in the package were $100 million to improve communications systems for emergency personnel nationwide, $90 million for health monitoring of emergency workers at Ground Zero and $82 million to enhance the FBI's counterterrorism technology.

"You can't strengthen our economy by weakening homeland security," Senate Majority Leader Tom Daschle, a South Dakota Democrat, said in a statement. "I fail to see how cutting funding for transportation security, counterterrorism or health care for firefighters strengthens either our economy or our nation."

Congress structured the $5.1 billion in spending as an all-or-nothing proposition to pressure Bush into supporting the package. It contains elements he supports, including $200 million for the Global AIDS fund, $200 million in aid to Israel, and $50 million for humanitarian relief for Palestinian areas. But lawmakers also added $4 billion of spending the administration opposes.

Items could return

"We're not going to spend $4 billion we don't need in order to unlock $1 billion we do," Bush said. He said he would add the items he supports to individual spending bills Congress must pass this fall to fund the government in fiscal 2003.

On the heels of several public appearances where Bush's upbeat pronouncements about the economy failed to calm the jittery financial markets, Bush walked a fine line at yesterday's forum between acknowledging problems in the economy and articulating a positive outlook for growth.

"We have heard from Americans who are concerned but not discouraged," Bush said, his Texan folksiness on display as he chatted and joked with participants during the four-hour event. "We've seen problems, but we're confident in the long-term health of this economy."

Bush and his advisers are keenly aware that his father's perceived aloofness toward the nation's economic troubles in 1992 played a big part in his defeat in that year's presidential contest, and are determined that the younger Bush will not suffer the same fate.

Plan to fix economy

The president used the forum to give his view on why the economy was faltering - a result, he said, of a recession that began before he took office, the terrorist attacks of Sept. 11, and corporate scandals. He promoted his economic agenda - including making his $1.35 trillion tax cut permanent, passing an energy policy overhaul and expanding minority homeownership - as the way out.

Even as Bush sounded notes of confidence, the Federal Reserve added a negative tinge, declining to cut short-term interest rates. The announcement disappointed investors, and the Dow Jones industrial average plummeted late yesterday, closing down 206.50.

Confidence down

Also yesterday, the ABC News-Money Magazine consumer index, a trusted tracking poll, found that consumer confidence has slipped to its lowest level since 1996.

Bush heard little, if any, criticism of his policies from participants, but he was not spared some unpleasant truths. Charles Schwab, an investment executive and major Republican contributor, said, "The bear market that we're suffering through right now is probably one of the worst I have ever gone through, and it's not a comfortable place to be."

The forum brought senior White House officials, CEOs and small-business leaders and workers to the Baylor campus. Teams of about 30 participants, each visited briefly by Bush or Vice President Dick Cheney, who said little, talked about such issues as corporate responsibility, job creation and the security of retirement savings.

Political theme

With the state of the economy gaining potency by the day as a political theme for this fall's elections, the gathering seemed to fire a starter pistol on the most intense partisan sniping to date on economic issues.

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