WASHINGTON – President Bush's campaign chairman became the latest backer to defend the president's economic policy, saying Thursday that the story of a barely resurging economy has been "elevated beyond what it is."
Marc Racicot said the president's economic report, which estimates that 2.6 million jobs will be created this year, is based on "a theoretical discussion by economists. What the report actually produces is every degree of evidence to suggest that this economy is poised for recovery."
"It's been mischaracterized," Racicot said in a television interview Thursday morning. "Take a look: 112,000 new jobs produced in January."
Bush was drawn into arguments over the economy again on Wednesday, when he declined to endorse an earlier government forecast that the nation will create some 300,000 jobs per month this year.
Instead, the president said he was pleased with the creation of 366,000 jobs in the last six months.
"I think the economy is growing. And I think it's going to get stronger. I do think there are some things we need to do. We need to make sure the tax cuts are permanent. I look forward to continuing to talk about this issue," Bush said Wednesday during a meeting with the leader of Tunisia.
The latest controversy erupted when three Cabinet secretaries, taking a bus tour of Oregon and Washington to address high unemployment there, were asked about job projections. This year's Economic Report of the President (search) — 412 pages of charts, graphs and texts delivered to Congress last week — forecasts 2.6 million new jobs by the end of 2004.
Though officials say he did not intend to do so, Treasury Secretary John Snow (search) seemed to take a skeptical view of the job numbers.
"I think we are going to create a lot of jobs. How many I don't know, but we're going to keep working on it," Snow said, adding that such predictions "are based on a lot of assumptions" and "not without a range of error."
When asked Wednesday about the projections, Commerce Secretary Don Evans said, "My crystal ball is not any clearer than anybody else's."
Since some observers saw the comments as an effort to distance themselves from the report, White House Press Secretary Scott McClellan was asked Wednesday whether the president stands behind it.
"I think what the president stands behind is the policies that he is implementing, the policies that he is advocating. That's what's important," McClellan said.
"The unemployment rate (search) continues to decline. It is now the lowest point — at the lowest point it has been in two years, and it is below the average of the '70s, '80s, and '90s. Certainly, productivity continues to be high, and people's disposable incomes (search) are up. There are a lot of good indications about the direction the economy is moving," McClellan added.
Analysts say the forecasts are tricky because as workers become more productive, which they have been doing each year, fewer workers are needed, making it difficult to say how many jobs will be created.
But that's not answer enough for Democrats, who sought to stoke the controversy on Wednesday. Democratic presidential front-runner John Kerry said it's apparent the White House is off in the ether somewhere.
"What it says to me is that they don't know what they're talking about in their own economic policy, that today it's one thing and tomorrow it's the next. It's the biggest say-one-thing-and-do-another administration in the history of the country," Kerry told supporters in Ohio, where the unemployment rate has jumped from 3.9 percent at the beginning of Bush's term to 6 percent now.
Six Democratic senators also sent Bush a letter calling for his economic team to explain to Congress how it reached its predictions and "to provide a meaningful jobs prediction that all Americans — including your own Cabinet — would find credible."
"When the White House's official economic report makes the wrongheaded suggestion that moving jobs overseas is beneficial to the economy and contains job projections that are not endorsed by your own Cabinet members, serious questions are raised that the administration's economic policies are in disarray," read the letter signed by Sens. Tom Daschle of South Dakota, Edward Kennedy of Massachusetts, Hillary Clinton and Charles Schumer of New York, Jon Corzine of New Jersey and Carl Levin and Debbie Stabenow of Michigan.
The senators did not say what they thought a credible prediction would be, but they added that the jobs controversy would be reduced if White House economist Gregory Mankiw (search) rescinded his assertion that "outsourcing" (search) American jobs overseas would be good for the U.S. economy in the long run.
Mankiw has been in a heap of trouble since his briefing last week on the report, in which he discussed the benefits of outsourcing for international trade. While several economists agreed with his analysis, Mankiw has since apologized for his seemingly insensitive remarks, saying the language he used was the talk of economists, not politicians.
"Economists and non-economists speak very different languages," Mankiw, a Harvard economist, told the National Economist Club (search) this week.
But even with his apology, some analysts say the problem is a larger one for the administration.
"I think there's a combination of a little bit of tone deafness on the part of some of the economic appointees, coupled with a little economic deafness on the part of others in the administration," said David Wyss, chief economist for Standard and Poor's (search) in New York.
"Even if it's better for the country in the long run, you've got to do something for the people who get run over by the truck on the way," Wyss said.
"When somebody tells you the market will work it out sooner or later, the one thing you know is that they're talking about somebody else's job," said Gene Sperling, a senior economic adviser to President Clinton.
Mankiw's comments "struck a chord of vulnerability and sensitivity about the overall record and attitude of President Bush's economic polices," Sperling said.
In their letter to the president, the Democratic senators also criticized Bush for "repeated broken promises" that tax cuts he proposed and that were enacted by Congress would raise the number of jobs.
McClellan said that proponents of raising taxes at a time when the economy is growing would end up doing more harm to the economy than good. Kerry has proposed cutting the deficit by half, at least, in a first term, in part through repeal of Bush tax cuts for wealthier Americans.
Bush and other officials said the projections are just that — the work of "number crunchers."
"People can debate the numbers all they want," McClellan said. "The president is interested in the actual number of jobs being created, and the president is interested in making sure that everybody who is looking for a job can find one."
The president also said he is not focused on projections, he is just trying to create jobs.
"I'm mindful there are still people looking for work, and we've got to continue building on the progress we've made so far," he said.
The administration's economic forecast, on which it based its budget projections, predicted that payroll jobs would average 132.7 million per month this year. In January, the Labor Department's (search) payroll survey found 130.2 million Americans working, a shortfall of 2.5 million.
Some analysts said that the bickering and the estimates will mean little in November. The only issue on which voters will judge the president is by how many people are employed at that time.
Fox News' Jim Angle and The Associated Press contributed to this report.