Bush, Democrats give rival views on state of economy

WASHINGTON -- A slowly recovering economy should gain momentum now that checks worth as much as $400 per child are heading for the mailboxes of American families, President Bush said Saturday.

Democrats responded by accusing him of presiding over the weakest job market since the Great Depression.

"We are starting to see some results from our actions," Bush said in his weekly radio address, citing his tax cuts and other economic stimulus measures. "Many economists expect that growth will accelerate in the coming months."

Democrats presented a far gloomier view in their radio address. They pointed to the net loss of 3.1 million jobs since Bush took office in January 2001 and a budget deficit expected to soar to $455 billion this year.

Democratic Gov. Mark Warner of Virginia blamed Bush's "massive tax cuts" for the rising federal deficits and for forcing states to cut vital services.

"Right now, this nation is on track for the worst job creation record since the Great Depression. No president since Herbert Hoover 70 years ago has actually lost jobs over the course of his term," Warner said.

Bush, using the same underlying economic data, said the unemployment rate would have been a full percentage point higher had his three successive tax cuts not been enacted.

He noted that the latest installment of tax relief -- rebate checks reflecting an increase of the per-child tax credit to $1,000 from the previous $600 -- are in the mail and already have reached some families. "That money will help American families move the economy forward," Bush said.

Job market still bleak

The contrasting assessments came a day after the Labor Department reported that businesses had slashed 44,000 jobs in July, the sixth monthly job loss in a row.

While the unemployment rate dropped to 6.2 percent from a nine-year high of 6.4 percent, the decline was due almost entirely to an exodus from the job market of discouraged workers, the report said.

Bush noted that other recent economic reports demonstrated "some encouraging news on the economy," showing stronger-than-expected growth in the April-June quarter and increases in manufacturing activity, retail sales and new home sales.

"Yet this week's employment report also shows that many Americans who want to work are still having trouble finding a job," he said. "My administration is acting to promote growth faster growth to encourage the creation of new jobs."

"The key to job growth is higher demand for goods and services. With higher demand, businesses are more likely to hire new employees."

Bush said three Cabinet members on their tour last week of the Midwest -- Treasury Secretary John Snow, Commerce Secretary Don Evans, and Labor Secretary Elaine Chao -- heard people tell them that the economy is improving.

But Democrat Warner ridiculed the excursion. "President Bush and members of his Cabinet launched a nationwide tour to tout their economic policies -- policies that have not worked," Warner said.

"As a governor, I know first hand how the administration's policies are failing to deliver on the promises of creating jobs."