Democratic presidential candidate John Kerry continued his attack on President Bush's economic policy Wednesday, slamming the president on jobs and the deficit.

"George Bush is the first president in 50 years who has lost jobs and will have lost jobs during his administration. George Bush has driven up the deficit," Kerry told Fox News.

Kerry said that instead of a tax cut for the wealthiest Americans, he would devote those funds to health care, benefiting both the average American and businesses that would no longer have to shoulder the health care (search) burden.

Earlier Wednesday during what was billed as a major economic policy address at Georgetown University (search), Kerry said Bush does not understand the economy and has failed to develop a plan for economic recovery.

"President Bush has no real economic plan for long-term prosperity and higher standards of living. I do, and at its heart is a strategy to create 10 million new jobs in the first term of a Kerry administration," the Massachusetts senator said.

For more on the campaign, click to view Foxnews.com's You Decide 2004 page.

Behind a banner reading, "Fiscal Responsibility = A Stronger America," Kerry attacked Bush on budgetary questions.

"In the last three years, the federal budget has gone from record surpluses to record deficits, which if left unchecked could become a fiscal cancer. George Bush now finally promises to reduce the deficit, the same promise of fiscal responsibility he's made and broken every year," Kerry said.

"The record is clear; a budget-deficit reduction promise from George W. Bush is not exactly a gilt-edged bond."

The Bush administration hit back, saying the economy is in good shape. Commerce Secretary Don Evans (search) told Fox News: "The American people will see beyond this political rhetoric and see that once the president's policies were enacted and worked their way into the economy, we had a very strong economy."

Kerry said that, if he is elected president, he will not let government programs outside of security and education grow beyond the rate of inflation, even if it means cutting money from some of his own campaign promises and existing government programs.

"When I say a cap on spending, I mean it," Kerry said. "We will have to make real choices — and that includes priorities of my own."

Kerry said he would freeze the federal travel budget, reduce oil royalty exemptions for drilling on federal lands, cut 100,000 federal government contractors and cut electricity used by the federal government by 20 percent.

He said the growing deficit will compel him to "slow down" some of his campaign promises, or phase them in over a longer period. He cited proposals for early childhood education and a program that would provide tuition to students attending state colleges in exchange for two years of national service, although he didn't say how much they would be scaled back.

Kerry said his four budget principles will be:

— cutting taxes that benefit the middle class, such as cuts for health care and education.

— restoring "pay as you go" budget rules that require spending and tax cuts to be offset by cuts in other programs or tax increases. Kerry said he will pay for much of his spending by repealing the Bush tax cuts for Americans who make more than $200,000 a year.

— requiring that spending, other than education and security, does not grow faster than inflation.

— cutting corporate welfare and using the savings to reduce the deficit.

Kerry's economic proposals have drawn fire from the Bush-Cheney re-election campaign. Kerry has yet to offer a detailed budget that explains how much he intends to spend to fulfill his campaign promises and where he will get the money to pay for them.

The Bush campaign said that third-party calculations of 44 of Kerry's programs show they would cost about $1 trillion over five years — an amount he can't pay without raising taxes.

Bush campaign spokesman Steve Schmidt said Kerry's numbers don't add up.

"John Kerry's refusal to detail a plan means his speech is a mix of political theater and rhetorical nonsense," Schmidt said. "John Kerry has previously voted against discretionary spending caps. This is yet another example of Kerry's campaign rhetoric being disconnected from the reality of his record."

Kerry promised to work with Sen. John McCain (search), R-Ariz. The two have co-sponsored a bill that would create a commission that would recommend budget cuts and submit them to Congress for a yes-or-no vote, with no amendments to keep pet projects.

"John McCain can't get anyone in the Bush White House to listen to our proposal," Kerry said. "If I'm president, John McCain will get the first pen when I sign this bill into law."

On a day of continuing violence in Iraq, Kerry saluted the troops, saying, "No matter what disagreements over how we approach policy in Iraq, and we have some, we are all united in our nation in supporting our troops and bringing democracy to Iraq."

Fox News' Peter Brownfeld and The Associated Press contributed to this report.