Bush declares economy full of steam
Published: Saturday, January 7, 2006 at 6:01 a.m.
Last Modified: Saturday, January 7, 2006 at 12:00 a.m.
CHICAGO - President Bush shrugged off a report showing weaker-than-expected job growth on Friday and declared that "the American economy heads into 2006 with a full head of steam."
Bush rattled off a string of recent government reports suggesting a growing U.S. economy, and he used his speech to the Chicago Economic Club to prod Congress to extend his administration's tax cuts that are due to expire.
"In 2005, the American economy turned in a performance that is the envy of the industrialized world," Bush said.
Bush, who also visited the Chicago Board of Trade, spoke as he and leaders of his economic team fanned out to trumpet recent improvements in the economy despite Friday's mixed jobs report showing a slowdown in monthly hiring.
U.S. payrolls expanded by 108,000 jobs during December, about half of expectations. But hiring in November was revised sharply upward, to 305,000 new jobs instead of the earlier reported 215,000. And the unemployment rate declined last month to 4.9 percent from 5.0 percent in November. By highlighting recent economic advances, Bush took an opportunity to turn attention away from the conflict in Iraq.
"By the way, we're going to win the war," he added as an aside. He confronted Democratic critics and others who oppose extending tax cuts scheduled to expire in 2008, including lower rates on stock dividends and capital gains.
"Just as this economy is getting going, there are some in Washington who want to take the money out of your pockets," Bush said.
He said that to oppose extending the tax cuts was the same as "saying we're gong to raise taxes on you."
Afterward, House Minority Leader Nancy Pelosi responded by saying Bush was seeking another round of tax cuts for the wealthy while middle-class families struggled to pay their bills. "The president claims he has created a strong economy, but working Americans are telling a different story," Pelosi, D-Calif., said in a statement. "They feel the American dream slipping further from their grasp and they know the reality is that this economy is not delivering for middle-class families."
The day also featured an appearance by Vice President Dick Cheney at a Harley-Davidson factory in Kansas City, Mo.; Treasury Secretary John Snow at the New York Stock Exchange; Commerce Secretary Carlos Gutierrez in Louisville, Ky.; Labor Secretary Elaine Chao in Baltimore; and Energy Secretary Sam Bodman in Pittsburgh.
At the motorcycle plant, Cheney said he and the president "understand that government does not create prosperity. And nobody in Washington can wave a wand and create jobs."
"What government can do, and must do, is help create an environment in which entrepreneurs want to invest and hire new employees, in which companies can expand and create more jobs," Cheney said.
Bush's poll numbers for handling the economy are up a bit since gasoline prices have fallen, according to AP-Ipsos polling.
Administration officials pointed to respectable if not spectacular holiday retail sales, rising consumer confidence and a third-quarter growth rate of 4.3 percent that was the highest since early 2004.
"We're productive. We're innovative. We're entrepreneurial," Bush declared. "And the role of government is to keep it that way."
Democrats counter by citing higher prescription drug costs and confusion about the new Medicare prescription drug plan, high heating bills, displaced workers in the Gulf Coast and rising federal deficits.
The president also called on Congress to exercise spending restraint and promoted the need for freer trade around the world and adequate education and job training.
Bush's choice of Chicago focused attention on the manufacturing-intense Midwest, which despite some recent improvements still has one of nation's weakest regional economies. The U.S. automobile industry has been hammered and manufacturing jobs continue to be lost, despite gains elsewhere.
Bush and other members of his economic team emphasized the overall creation of new jobs over the past year and the decline in the unemployment rate, rather than the somewhat disappointing job growth figures for December.
Snow said that there is room for unemployment to drop further, especially if Congress extends the administration's tax cuts due to expire in 2008.
"This is not absolutely full employment. It's getting pretty close, but I don't think we've gotten all the way there," the treasury secretary told CNBC television. He predicted the economy would create "a substantial number of new jobs in '06 and '07."
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