President backs off job growth forecast

WASHINGTON -- President Bush backed away yesterday from his assertion that 2.6 million jobs will be created this year, saying "there are some things we need to do" to strengthen the economy.

The retreat occurs a day after two Cabinet secretaries distanced themselves from the White House Council of Economic Advisors report -- issued last week and signed by Bush -- that anticipated robust job production this year.

Democrats, eager to make the economy, job losses, and the Bush administration's credibility election issues, were quick to capitalize on Bush's retreat.

"They don't know what they're talking about in their own economic policy," Senator John F. Kerry of Massachusetts, the front-runner for the Democratic presidential nomination, said in Ohio, where unemployment has risen from 3.9 percent to 6 percent since Bush took office. "Today it's one thing. Tomorrow it's the next. It's the biggest say-one-thing-do-another administration in the history of the country."

Six Democratic senators, including Edward M. Kennedy of Massachusetts, called on Bush to send another economic report to Congress with another jobs forecast. "While we hope that your projections are accurate, we are concerned that your economic report presents an unrealistic picture of the economy as the 2004 election year gets under way," the senators wrote.

Asked specifically if he still believed the economy would produce 2.6 million new jobs this year, Bush said yesterday: "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."

Bush then called for Congress to make his tax cuts permanent, pass his energy plan, open up markets for trade, reduce regulation, and cap jury damage awards. Later in the day, White House press secretary Scott McClellan refused to endorse the 2.6 million job prediction, despite repeated questions from reporters.

The forecast came under special scrutiny after Treasury Secretary John Snow and Commerce Secretary Don Evans refused this week to support the optimistic prediction as they toured Western states to promote the president's economic programs.

Democrats spun the White House responses as signs of disagreement within the administration as to how the economy will perform this year and as another example of presidential promises not being met by reality.

Previous administration predictions of job creation, made as the president was pressing Congress for tax cuts, have been far off the mark.

Tim Kane, an economist and a research fellow with the Heritage Institution, a conservative think tank in Washington, said people are probably making too much out of the jobs prediction by the Council of Economic Advisors.

"I think it's a little bit of cherry-picking," Kane said.

Kane said the American economy has changed and statistical models do not reflect the growing number of workers who are in nonpayroll jobs and are not included in Bureau of Labor Statistics jobs figures.

"The White House should take credit for presiding over an economy that has 138.6 million working Americans, almost a million more than under Bill Clinton," Kane said. "The focus should not be on payroll jobs, but on people, and Labor Department data show that more Americans are employed than ever before."

But the Bush administration has come under intense criticism from Democrats over job creation.

Bush faces the prospect of being the first president since Herbert C. Hoover to see the nation lose more jobs than it gained during his term.

So far, Bureau of Labor Statistics figures show that 2.3 million jobs have been lost since Bush took office. If the prediction of the Council of Economic Advisors were to come true, the president would be spared that linkage with Hoover.

For that to happen, however, an average of 217,000 jobs would have to be created each month this year.

In January, only 112,000 jobs were created, Bureau of Labor Statistics figures show.

The economy has lost jobs in 24 of the 37 months Bush has been in office, though there has been a net gain in new jobs in each of the past five months.

Craufurd Goodwin, an economics professor at Duke University, said he believes employers are reluctant to take on new workers in a climate of rising fuel costs and uncertain interest rates, which could rise if the federal budget deficit -- already above $500 billion -- continues to grow.

In such a climate, Goodwin said, making the tax cuts Bush pushed through Congress permanent might actually stifle job creation.

"People are a little dubious," Goodwin said. "People see this huge deficit and think, `What's this going to mean for interest rates?' "

Bush administration officials have touted tax cuts as a way to stimulate economic growth and spur job creation. As he campaigns for reelection, Bush tells audiences in city after city that his tax cuts, some of which are due to expire in the next several years, led to strong economic growth and job creation.

He blames the loss of jobs on recession, the Sept. 11, 2001, terrorist attacks, and corporate scandals.