Bush report - Economic recovery is under way

WASHINGTON-- Declaring that "America's economy is strong and getting stronger," President Bush told Congress Monday in his annual economic report that last year's tax cut was doing the job in reviving business growth.

This year's 412-page "Economic Report of the President," is considerably more upbeat than Bush's report a year ago, issued at time when the country was still mired in a lackluster recovery with the unemployment rate continuing to rise.

In the new report, written as a strong defense of Bush's economic stewardship, the president says that the country has been able to overcome a series of shocks starting with the bursting of the stock market bubble in early 2000 followed by the first recession in a decade, the terrorist attacks, two wars and corporate accounting scandals.

"Americans have responded to each challenge and now we have the results: renewed confidence, strong growth, new jobs and a mounting prosperity that will reach every corner of America," Bush wrote in the message transmitting the report to Congress.

2004 economic forecast

The report, prepared by the president's Council of Economic Advisers, contained the administration's economic forecast for 2004. It predicted that the economy will grow by 4 percent and create 2.6 million new jobs this year.

If the jobs forecast comes true, it will represent the first year of the Bush presidency in which there will be a net increase in payroll jobs. Since he took office, the country has lost 2.2 million payroll jobs.

On the campaign stump, Democratic presidential candidate Sen. John Kerry said Bush had the worst jobs record of the last 11 presidents and the rosy view of the economy presented in the new report was probably "prepared by the same people who brought us the intelligence on Iraq."

"I don't think we need a new report about jobs in America. I think we need a new president who is going to create jobs in America and put America back to work," Kerry told a campaign rally in Roanoke, Va.

Social Security is one of the issues examined in the administration's report with a CEA analysis speaking favorably of one of the options put forward by a commission Bush appointed to examine the looming funding crisis in Social Security.

Under this proposal a portion of American workers' Social Security payroll taxes would be diverted to private investment accounts. While this proposal would increase the national debt over the next 30 years because the money would not be available to pay for current retirees' benefits, it would save the government from facing far larger deficits later on, the CEA analysis said.

Bush has said he favors using private accounts to fix the serious funding shortfall facing Social Security, but he hasn't endorsed a specific proposal.

The release of Bush's economic report came on a day when the president traveled to Missouri to tout the country's economic rebound, one of three such trips he has scheduled this week.

Bush took note of a number of encouraging developments in recent months, including strong economic growth beginning last summer which has finally begun to encourage the nation's businesses to start rehiring laid off workers.

Acknowledging his jobs' deficit, Bush said, "We are moving in the right direction but have more to do. I will not be satisfied until every American who wants a job can find one."

The president credited last year's tax cut for making a sizable contribution to boosting economic growth.

Democrats and Bush's first Treasury secretary, Paul O'Neill, have attacked that tax cut as being unnecessary and have charged that it made the deficit problem worse. Bush fired O'Neill in December 2002 after he raised objections to going forward with further tax cuts.

The economic report came a week after Bush sent his new budget to Congress, a document that projects that this year's deficit will hit a record $521 billion.

Bush blamed the huge deficit on the recession and the costs of boosting security at home and fighting the wars in Afghanistan and Iraq. He said that his budget contained a plan to cut the deficit in half over the next five years, a task he said would be made easier by the growing economy.