W.House Sees No New Economy Steps as Jobless Rise
Updated 12:59 PM ET September 7, 2001
By Randall Mikkelsen
WASHINGTON (Reuters) - The White House said on Friday better times were coming for the U.S. economy and no new steps were contemplated to boost it, as an unemployment jump raised pressure on President Bush to show results.
Unemployment figures released on Friday showed the jobless rate jumped in August to a nearly four-year high of 4.9 percent, up from 4.5 percent in July, as companies cut 113,000 workers from their payrolls.
``It was certainly not a good news report, but it doesn't really alter the view that the economy is near a turning point,'' Glenn Hubbard, chairman of the White House Council of Economic Advisers, told Reuters in a telephone interview.
``We're still looking for improvement in the economy by the end of this year, by the fourth quarter of this year into 2002,'' Hubbard said.
Democrats quickly denounced the figures as evidence of economic mismanagement by Bush.
``I think it's a reflection, unfortunately, of the Bush budget and Bush economy,'' said Senate Democratic Leader Tom Daschle of South Dakota.
White House spokesman Ari Fleischer said Bush's $1.35 trillion tax cut and a series of Federal Reserve interest rate cuts had occurred at ``exactly the right moment'' to help the economy.
Officials saw no need for new steps to bolster the economy. ''There is substantial additional stimulus on the way,'' Hubbard said.
Fleischer said Bush remained open to a cut in capital gains taxes, but believed his existing tax cut would work and wanted to assess its impact before considering additional cuts.
He said Bush ruled out increased spending to stimulate the economy and rejected suggestions by some Republicans that it might be necessary to dip into the Social Security budget surplus. Hubbard said across-the-board spending cuts were one option to shield Social Security surpluses, but added current projections showed they were not needed.
GEPHARDT SAYS BUSH RESPONSIBLE
House of Representatives Democratic Leader Richard Gephardt of Missouri told reporters after meeting Bush that the president had undermined the economy through his tax cut which reduced budget surplus projections.
``I think the economy is reacting to the president's budget plan,'' Gephardt told reporters after meeting Bush at the White House. ``They're looking at a deteriorating deficit picture, and long-term interest rates are now higher than they should be if we were on a different budget path.''
Hubbard dismissed these charges as ``nonsense.''
Although the White House has consistently noted that a slowdown in U.S. economic growth began during the administration of former Democratic President Bill Clinton, Gephardt said the economy was now Bush's responsibility.
``I think the real slowdown has begun in the last six months,'' he said. ``I think the economy has reacted to the president's budget plan.''
Gephardt added it was Bush's responsibility to propose changes in the budget.
``We need new budget suggestions,'' he said.
Although the White House played down the economic significance of the jobless report, officials were quick to stress that they recognized the impact of the rising jobless rate on Americans.
The re-election defeat of Bush's father, former President George Bush, was attributed in part to criticisms he did not show sufficient concern for economic woes.
``The president is very concerned about the rise in unemployment as was announced today. He is concerned about anything that would indicate that Americans are being laid off and he has a plan in place to address this issue,'' Fleischer said. |
