Debate Rages Over Bush Team Economic Warnings
Updated: Thu, Dec 21 12:17 PM EST
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WASHINGTON (Reuters) - Fresh debate raged on Thursday over
whether warnings from President-elect George W. Bush and his team of
rough economic times ahead constitute "talking down" the economy or
necessary "straight talk" about an evolving slowdown.
Early on Thursday morning, the head of the National Economic Council
and President Clinton's economic adviser, Gene Sperling, accused Bush
of undermining the economy for short-term partisan gain so as to
bolster the case for a Republican tax cut plan.
"What you're seeing is President-elect Bush and his team actually
talking down our economy, actually probably injecting more fear and
anxiety into the economy than is justified. And I think that's a serious
mistake for him," said Sperling.
"I think it sends a signal that he's willing to be political in describing the
economy instead of serious and disciplined and not political," Sperling
added in an interview on ABC's "Good Morning America" program.
That the U.S. economy has slowed from the breakneck pace of early
2000 is undeniable. The government on Thursday revised down its
estimate of growth in gross domestic product -- the measure of total
goods and services produced within U.S. borders -- to an annual rate
of 2.2 percent in the July-September period from 2.4 percent reported
a month ago.
That was less than half the second quarter's 5.6 percent rate of
expansion and was the most sluggish for any quarter since a 2 percent
rate during the third quarter of 1996.
Vice President-elect Dick Cheney, who earlier this month came under
fire from the White House for uttering the R-word -- warning that the
United States might be on the "front edge of a recession" -- on
Thursday softened his rhetoric and said he and Bush were not trying to
talk down the economy.
"We don't want to talk down the economy, clearly, and I think both
President Bush and I have tried to be cautious in that regard," he said.
"There does seem to be a lot of evidence out there that in fact the
economy has slowed down some," he told reporters. "Whether or not
this ultimately results in a recession, that is negative real growth,
nobody knows at this time."
Most economists define a recession as two straight quarters of a
declining economy, as measured by the GDP data.
In recent weeks, Republicans allied with Bush, who will be sworn in as
the 43rd U.S. president on Jan. 20, have predicted economic trouble
ahead in what some analysts say is an effort to justify sweeping tax
cuts opposed by Democrats.
On Wednesday, Bush said he saw "warning signs of a possible
slowdown." He tied economic prospects to his proposed 10-year, $1
trillion-plus tax cut. "I believe strongly that tax relief is part of the
prescription for any economic ill that our nation may have," Bush told a
news conference.
A Bush transition aide also weighed in on Thursday, saying the
admission that a slowdown appeared to be underway was not a move
to hurt the economy
Bush transition spokesman Ari Fleischer said financial markets have
been losing ground for months, "before the president-elect said a word"
about the possibility of an economic slowdown.
"It's not how markets work, and investors are a little more sophisticated
on that score," Fleischer told reporters, disputing Sperling's suggestion
that this was a calculated move to make tax cuts more palatable.
Fleischer repeated Bush's concerns. "We are worried about a potential
slowdown, and we want to make sure that steps can be taken to avert
it," he said.
"It's very important to look long-term, to think long-term, and to be
forthright with the American people," Fleischer added. "The American
people welcome straight talk." |
